1. Volume 6,Number 4
Quarterly Newsletter October 2012
Quarter IN REVIEW markets have delivered an unexpect-
By: Jon P. Yankee, MBA, CFP®
ed gift: a steady, gradual rise in stock Asset Class Performance Q3 2012:
prices that seemed, week by week,
Climbing the Wall of Worry contrary to the mood expressed in
the financial press.
U.S. Fixed Income 1.58%
It seems like every quarter we find (Barclay Capital Aggregate Bond Index)
ourselves saying the same thing: Here at the end of the third quarter,
what a difference a quarter makes! entering the home stretch for the International Fixed Income 1.78%
year, the returns on many of the (JP Morgan GBI ex-US (Hedged) Index)
In the first two months of 2012, the
U.S. stock market was recording broad stock indices are, surprisingly, U.S. Equities, Large 6.35%
excitingly positive returns. The U.S. well into double-digit territory. The (S&P) 500 Index)
economy seemed to be back on S&P 500 index of large company
stocks gained 6.35% in the third
U.S. Equities, Small 5.25%
track and there was talk that the Euro (Russell 2000 Index)
crisis was finally behind us. Even the quarter, and is up 16.44% so far this
year. Small company stocks have International Equities, Large 6.14%
pullback in March left the markets (MSCI EAFE Index)
in positive territory. Then came a posted returns nearly identical to the
difficult second quarter where the large multinationals. The Russell 2000 International Equities, Small 7.86%
indices fell across the board, nearly small-cap index gained 5.25% in the (S&P EPAC Small Index)
wiping out the first quarter gains. three months ending September 30,
Real Estate Investment Trusts (REITs) 1.03%
Now, in the last three months, while and has returned 14.23% for the (FTSE NAREIT All Equity REITs)
many investors were still anxious year so far.
Continued Pg. 3 Commodities/Natural Resources 9.69%
about Europe, deficits, paralysis in (DJ UBS Commodities Index)
Washington and unemployment, the
Ginnie at a Glance
By: Ginnie F. Baker
Some of you may recognize me from the July 2011 newsletter which introduced me as one of
the 2011 Summer Associates. After my time with FJY ended last summer, I returned to Texas
Tech University in Lubbock, Texas to finish my Master Degree in Personal Financial Planning. When
I heard that FJY was looking to hire a new Associate Advisor I was very excited to
apply for this opportunity. I met with Jon and Laurie at Texas Tech’s Annual Opportunity Days
and knew that FJY was just what I was looking for in a firm. I enjoyed the people, culture,
camaraderie, and experience so much last summer that I knew FJY would be the perfect fit for
me. I flew up during spring break to interview with the entire firm for two days. I then spent the
weekend enjoying the sights of Washington, DC and Northern Virginia. In July of this year, I joined
FJY as an Associate Advisor. Continued Pg. 3
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Quick Planning Question:
if you have made any significant home improvements, did you
notify your homeowners insurance company?

2. Due Diligence
By: Lisa Crafford, Office Manager Business and Wealth Management Forum – Dan, Jon,
and Lisa attended this forum which has a strong practice
Each year FJY attends industry functions, conferences, and management focus. Part of running a great practice is
forums to better equip us to be your financial advisors. providing great service and advice to our clients, another
One of FJY’s differentiators is our focus on education; in aspect is running an efficient business. We came away from
addition to hiring top talent from across the country, we the conference with many ideas for how to improve our
strive to maintain a competitive advantage through ongo- operations.
ing educational opportunities. Below is a summary of our
recent and upcoming activities. Tamarac – Dan, Tess, and Ginnie attended a training and
user conference, and Jon and Laurie will attend training
DFA (Dimensional Fund Advisors) Financial Advisor – All later this year for our newest software – Tamarac. Tamarac
of our advisors attended a two-day symposium to further Advisor Rebalancing is a tool which allows us to more
their knowledge of the capital markets. Dimensional Fund efficiently monitor, rebalance, trade, and reconcile client
Advisors manages mutual funds for long-term investors of portfolios.
a select group of fee-only financial advisors. DFA provides
education to advisors about investment philosophy, ap- Steben & Company National Advisor Forum – Jon and
proach, and product offering. Laurie attended this due diligence event for the managed
futures investments offered by Steben & Co. They heard
DFA Applied Communication – This conference is a day- from Ken Steben, President and CEO, members of Steben’s
long, interactive experience focused on how to more research department, as well as Winton Capital, a Com-
effectively communicate with clients. We came away with modity Trading Advisor (CTA). Laurie also spoke on the
great examples and ideas on how to best deliver advice advisor panel.
to our clients.
FPA – The Financial Planning Association’s annual confer-
AIF® (Accredited Investment Fiduciary) - Marjorie holds ence focuses on many key issues in our industry, such as
the AIF® designation which requires ongoing education, ethics, compliance, using analysis to guide portfolio man-
and a commitment to a code of ethics each year. The agement decisions, how to set client expectations, and
AIF® designation identifies advisors who have a thorough how health care reform affects FJY and our clients.
knowledge of and ability to apply fiduciary practices.
There are many other great learning opportunities coming
NAPFA (National Association of Personal Financial Advi- up in 2012 and early next year. We are working with the
sors) – Marjorie is speaking on a panel with two experts FCEDA (Fairfax County Economic Development Authority)
(an estate attorney and a CFP®/mental health specialist) which provides educational seminars for small businesses
on the topic of what to do in the case of a client death. In in Fairfax County throughout the year, and we plan to at-
addition, there are several notable sessions; for example, tend training on Portfolio Center, local FPA symposiums,
managing conflict, social security, 401k, and continuing and a Life Planning conference. We will continue to share
care retirement communities. with you during your meetings any takeaways or ideas we
gain from these experiences.

3. Ginnie at a Glance: cont
Some economists think that the stock rally was a gift from the central
banks. For months, it was rumored that the U.S. Federal Reserve Board
I will be supporting all of the advisors with ongoing client services, would engineer another stimulus package, which had already been
comprehensive financial planning, and client asset management. I will dubbed “QE3”--and indeed Fed Chairman Ben Bernanke announced
also focus on building and maintaining client relationships. I am avail- that the Fed would inject $40 billion a month into the market for secu-
able to assist you with client-service related matters, from scheduling ritized home mortgages, adding to the money supply, possibly driving
meetings to helping with account information. down mortgage rates, and (again possibly) stimulating the housing and
homebuilding sectors of the economy into hiring again.
I was first introduced to financial planning through an elective course
while working towards my undergraduate degree. At the end of that Meanwhile, the European Central Bank has finally announced that it
course, I knew that financial planning was the career I wanted to pur- would do what economists were calling for three years ago: pur-
sue. I earned my Bachelor of Business Administration degree from the chase Eurozone government bonds to reduce the borrowing costs of
Rawls College of Business at Texas Tech University. Texas Tech has the countries that are restructuring their finances--notably Spain and Italy.
top financial planning program in the nation, so it was an easy decision After press conferences on different sides of the Atlantic, some of our
for me to continue my education at Tech and work towards my Master worst-case economic scenarios (a 2008-like collapse of the Eurozone
of Personal Financial Planning degree. banking system; a U.S. recession) seem to have become less likely to
occur.
I was born and raised in Lubbock, Texas. In my spare time I enjoy
spending time with my friends and family, baking, watching sports, The U.S. economy is certainly not in danger of breaking any speed
traveling, and exploring the DC metro area that I now call home. records as it continues to climb out of the Great Recession; in the
last week of September, the government announced that from April
I currently serve on the FJY Financial Planning and Investment Commit- through June, GDP grew just 1.3%. Economists remain wary of the
tees along with being a member of FPA (Financial Planning Associa- “fiscal cliff” – the simultaneous expiration of lower tax rates and auto-
tion), FPA NexGen (an organization of young planners), NAPFA (Na- matic federal budget cuts – that will take place, absent Congressional
tional Association of Personal Financial Advisors), and NAPFA Genesis intervention, on December 31. Add in the discouraging (but improv-
(an organization for fee-only planners under the age of 33). ing) 7.8% unemployment rate, and there is plenty of reason not to be
bullish on stocks for the last three months of the year.
I am looking forward to the opportunity to meet all of you.
But of course that was also true before stocks went up the past three
Quarter in Review: Cont months. Optimists can point to 114,000 new jobs added in Septem-
ber, and the fact that the unemployment rate has been trending down-
The next time you read gloomy headlines about the economy, remem- ward from around 10% at this time three years ago. A Bloomberg
ber that every single industry sector in the S&P 500 is posting gains so News survey recently forecast that the U.S. economy will grow 2.1%
far this year. over the next three months, and the forecasts from the Federal Reserve
Board anticipate 2.5% to 3% GDP growth in 2013. At the upper end
International stocks have not been as robust as U.S shares, but they, of that estimate, we are talking about a return to economic normalcy,
too, are in positive territory. The broad-based EAFE index of devel- and a chance to chip away at the jobless rate.
oped economies rose 6.14% for the third quarter, and is now in firmly
positive territory, with a gain of 6.95% so far this year. Who’s right? Who knows? All we know for sure is that the global
economy is in a slow-growth recovery, with little indication that growth
On the bond side, those of us who could not imagine how U.S. Trea- will accelerate dramatically or that the U.S. will slide back into reces-
suries could possibly offer lower yields are watching it happen. The sion. Buying stocks today is a bet that the hard work of millions of
12-month Treasuries are now yielding just 0.15%, as investors seem to people still employed will produce positive results over the long term,
be happy to essentially lend the government money with a promise which will ultimately reward the owners who hold their shares. For as
that they will get it back again 12 months later. Locking up your money long as the markets have existed, staying invested has been a good
for three years gets you 0.31% a year. Ten-year issues yield 1.63%, and long-term strategy--and in the face of so much short-term uncertainty,
30-year Treasuries bring a 2.82% annual coupon yield. this is about all we have to go on.

4. should it be necessary, make cash Sometimes this ability to act quickly
available if needed (for withdrawals or can be of great importance and value
fees), and make investment changes – to clients. However, in no way will
1925 Isaac Newton Square all without having to get prior approval
Suite 400 this change our fundamental goal of
from the client. having clients educated and informed
Reston, Virginia 20190
regarding how we are managing their
1.703.889.1111 phone Sharing discretion does NOT allow
portfolios.
1.877.395.7795 toll free FJY to change investment strategy or
1.866.366.9233 fax asset allocation for clients, nor does
Why did we do this? The change
it change FJY’s goal of continuing to
toward sharing discretion with clients
www.fjyfinancial.com focus on educating our clients.
was not made without significant
discussion and internal debate. In the
What is the benefit to our clients?
end, we decided that this change is in
Shared discretion will allow FJY to
the best interest of our clients, which
have more flexibility and improve our
is always our primary concern. We en-
ability to act quickly on our clients’ be-
courage you to give us a call to discuss
half with regard to investment portfolio
this matter if you have concerns or ad-
decisions. With any decision we make,
ditional questions about discretion.
FJY and Discretion FJY’s goal is to maintain the quality of
service our clients deserve and have
come to expect. Our enhanced ability
As many of our clients are already
aware, FJY is currently taking steps to act for our clients will enable us to FJY Advisors
& Staff
to move toward sharing discretion implement investment changes, tax
on investment portfolios with our planning, and other portfolio service is-
clients. This poses several impor- sues quickly, without need to first gain
Marjorie L. Fox
tant questions. The goal of this approval from our clients. Sr. Financial Advisor
article is to address those ques- Daniel D. Joss
tions and provide insight into why Sr. Financial Advisor
we are making this change. Jon P Yankee
.
Sr. Financial Advisor
What is discretion? Discretion Laurie A. Belew
can be defined as the “freedom Marjorie and David at the wedding of their Sr. Financial Advisor
to decide what should be done in son, Doug, and Kacie Davis in California.
Tess L. Downing
a particular situation”. FJY’s dis- Financial Advisor
cretion will be limited to trading Ginnie F. Baker
decisions. Sharing trade discretion Associate Financial Advisor
with our clients will allow FJY the Matthew T. Davis
freedom and flexibility to act on Paraplanner
existing instructions, invest new Lisa J. Crafford
cash or rebalance a portfolio Office Manager
Sally M. Yankee
Administrative Assistant
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future
performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this newsletter, will be profitable, equal any corresponding indicated
historical performance level(s), or be suitable for your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions
or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment
advice from Fox, Joss & Yankee, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/
she is encouraged to consult with the professional advisor of his/her choosing. A copy of our current written disclosure statement discussing our advisory services and fees is available for
review upon request.
Historical performance results for investment indices and/or categories have been provided for general comparison purposes only, and generally do not reflect the deduction of transaction
and/or custodial charges, the deduction of an investment management fee, nor the impact of taxes, the incurrence of which would have the effect of decreasing historical performance
results. It should not be assumed that your account holdings correspond directly to any comparative indices.