1. Mallard’s Newark Office Welcomes Alan Menase
Alan Menase began working at Mallard as a Client Services Advisor on January 3, 2012. He
grew up in Rockville, Maryland, earned a bachelor’s degree from the University of Delaware in
2003, and completed the CFP® Board Registered Program last year, at Chicago’s Northwestern
University. He and his fiancé Kate moved to Newark in December.
Paul: We are very pleased that
Alan can join Pam’s Operations
team as they are in the midst of a
massive conversion of our portfolio
management software. We expect
that over time Alan will earn his
CFP® designation, and develop into
an Advisor, serving Mallard’s
growing client base.
During our search, I was very
impressed with Alan’s passion for
financial planning, and his ‘only
fee-only’ view of the proper
manner to provide clients with
financial planning. He has helped lead NAPFA Genesis, a group of younger planners within the
NAPFA, national fee-only financial planners’ organization that I have been involved with since
1993. I met several of his NAPFA Genesis colleagues at the ‘boot camp’ that I helped lead in
October 2011, and I was quite impressed with them.
Pam: As Manager of Operations, I am excited about Alan joining our team. Alan brings a
wealth of valuable talents such as an excellent, current education base, technology savvy and
my personal favorite, a passion for fee-only and client centered service As he is introduced and
masters our many functions and responsibilities, I am anticipating fresh insights into how we
can more effectively serve our client base and financial outreach. I am looking forward to an
innovative and exciting new year. Alan, welcome to our Mallard family!
Alan: I am extremely excited to become a part of the Mallard family. I am looking forward to
working closely with the staff to assist them in their needs and gaining knowledge in the field to
become an asset to the company.

2. FIREWALL IS COMING DOWN
January 5, 2012
Investor fear has fallen to a more moderate level, for several very good reasons, and we are therefore
lowering Mallard’s Firewall which we raised in late September. In the past three-plus months we have
segregated clients’ stocks from their bonds, and their riskier bonds from their safer bonds. We did this to
permit clients’ riskier assets time to recover, while safeguarding client’s safer assets to assure our clients that
their day-to-day spending needs were fully protected.
The fifteen-week timeout permitted the US stock market to rebound more than 13%, and foreign stock
markets to recover 10%. The system worked.
It is time to lower the Firewall, and return to ‘normal investing.’ This means that we are back to regularly
rebalancing clients’ accounts, shifting to/from stocks, based on long-term targets, and shifting between safer
and riskier bonds. In many cases we will be replenishing clients’ safer bonds (and their cash) which were
drawn down a bit since September.
The reasons to lower the Firewall, the reasons that investor confidence has returned, is that the evidence of
the US economic recovery is quite strong. Joblessness is falling, job creation is ramping upward, finally!
Corporate profits are at all-time peak levels, corporate balance sheets are incredibly strong, housing appears
to be turning (also, finally!), auto sales have been rising steadily, consumer finances are strengthening, and it
appears that consumer spending is returning.
2011 was the fifth straight year in which investors were net sellers of US stock funds, and the 11 th straight for
being net buyers of US bond funds. This has left US stock prices quite low, bond prices quite high. As a result,
stock investors are being paid well (dividends) to wait for sanity to return to the markets. This also results in
stock investors having quite a bit of downside protection, much more than bond investors enjoy today. We
need to lower the Firewall to enable our clients to adjust to these opportunities and risks.
One reason that we raised the Firewall was to help our clients sleep well at night. We do not expect smooth
sailing in 2012—just the opposite. However, the stock markets have priced in much bad news, more bad news
than I expect will unfold. I feel that it is more likely that by the end of the year, we will have enjoyed more
positive surprises than negative ones, partly because we are already prepared for many 2012 risks (US
deficit/debt, European sovereign debt crisis, slowing emerging markets, Congressional paralysis, upcoming US
elections).
I will discuss this at length on the quarterly conference call on Friday January 13th at 4pm. I will also
periodically post updates at our website—see Paul’s Blog in the list at the left side of
www.mallardadvisors.com.
Paul S Baumbach, CFA, CFP®, ChFC www.mallardadvisors.com Mallard Advisors, LLC