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Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
Generational Wealth Management - Week 4
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Generational Wealth Management - Week 4

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  • 1. Wealth Management An Unbiased Approach to Managing Your Investments Designed for the Affluent Investor
  • 2. Wealth Management Process Week 4: Managing Your Investments Manager Selection Financial Advisor Implementation Investment Policy Performance Monitoring
  • 3. Methods Implementation Methods: Lump-Sum Investing Dollar-Cost Averaging Modified Dollar-Cost Averaging Modified DCA differs from normal DCA in that it takes movements in the market into consideration. DCA does not assure a profit and does not protect against loss in declining markets. Such a plan involves continuous investment in securities regardless of fluctuating price levels and and investor should consider their financial ability to continue their purchases through periods of low price levels.
  • 4. Methods Calling the bottom is impossible (Review) Boston Globe, Aug 12, 2000 - "…at these undervalued prices…we're not selling any stock at these prices". (On Monday, Aug 14, the S&P 500 closed at 1491. Four years later on Aug 12 2004, the S&P fell a further 29% to close at 1063.) Wired Magazine, Dec 4, 2000 - "Fred Siegel, president of investment management firm Siegel Group, believes that it is unlikely that the Nasdaq will drop more than another 200 points." (The Nasdaq fell over 1,000 points shortly after Siegel made his prediction.) Market guru and former hedge fund manager Jim Cramer of TheStreet.com said it well in Jan 2001: “I get paid to call bottoms. I don't see one yet, but in my 18 years of trading I've never called one exactly right yet. I don't see why this time will be any different." DCA does not assure a profit and does not protect against loss in declining markets. Such a plan involves continuous investment in securities regardless of fluctuating price levels and and investor should consider their financial ability to continue their purchases through periods of low price levels.
  • 5. Methods DCA vs. Lump Sum Investing A couple has $500,000 to invest. What are the possible ways to invest and what are the possible outcomes? DOLLAR COST AVERAGING LUMP SUM INVESTING Declining Market Bound Market Increasing Market ? ? ? ? ? ?
  • 6. DCA vs. Lump Sum Investing Dollar Cost Averaging Example: Declining Market DATE TOTAL VALUE 2000.00 2222.22 2500.00 2857.14 3333.33 $50.00 $45.00 $40.00 $35.00 $30.00 TOTAL $100,000 $100,000 $100,000 $100,000 $100,000 $500,000 2000.00 4222.22 6722.22 9579.37 12912.70 12912.70 $100,000.00 $190,000.00 $268,888.89 $335,277.78 $387,380.95 $387,380.95 PRICE TOTAL SHARES OWNED SHARES PURCHASED DOLLAR AMOUNT INVESTED PRICES ARE DECREASING 01/01/13 02/01/13 03/01/13 04/01/13 05/01/13
  • 7. DCA vs. Lump Sum Investing Dollar Cost Averaging Example: Declining Market YOUR AVERAGE COST IS ACTUALLY LOWER THAN THE AVERAGE PRICE Average Price of XYZ Average Cost of XYZ Your Average Cost $40.00 $38.72 $1.28 less than average price
  • 8. DCA vs. Lump Sum Investing …vs. Lump Sum Investing: Declining Market DATE TOTAL VALUE (LUMP SUM) $50.00 $45.00 $40.00 $35.00 $30.00 TOTAL $500,000 0 0 0 0 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 $500,000.00 $450,000.00 $400,000.00 $350,000.00 $300,000.00 $300,000.00 PRICE TOTAL SHARES OWNED DOLLAR AMOUNT INVESTED PRICES ARE DECREASING TOTAL VALUE (DCA) $100,000.00 $190,000.00 $268,888.89 $335,277.78 $387,380.95 $387,380.95 01/01/13 02/01/13 03/01/13 04/01/13 05/01/13
  • 9. DCA vs. Lump Sum Investing Dollar Cost Averaging Example: Bound Market DATE TOTAL VALUE 2000.00 2222.22 1818.18 2000.00 2000.00 $50.00 $45.00 $55.00 $50.00 $50.00 TOTAL $100,000 $100,000 $100,000 $100,000 $100,000 $500,000 2000.00 4222.22 6040.40 8040.40 10040.40 10040.40 $100,000.00 $190,000.00 $332,222.22 $402,020.20 $502,020.20 $502,020.20 PRICE TOTAL SHARES OWNED SHARES PURCHASED DOLLAR AMOUNT INVESTED PRICES ARE FLUCTUATING 01/01/13 02/01/13 03/01/13 04/01/13 05/01/13
  • 10. DCA vs. Lump Sum Investing Dollar Cost Averaging Example: Bound Market YOUR AVERAGE COST IS SIMILAR TO THE AVERAGE PRICE Average Price of XXX Average Cost of XXX Your Average Cost $50.00 $49.80 $0.20 less than average price
  • 11. DCA vs. Lump Sum Investing …vs. Lump Sum Investing: Bound Market DATE TOTAL VALUE (LUMP SUM) 01/01/13 02/01/13 03/01/13 04/01/13 05/01/13 $50.00 $45.00 $55.00 $50.00 $50.00 TOTAL $500,000 0 0 0 0 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 $500,000.00 $450,000.00 $550,000.00 $500,000.00 $500,000.00 $500,000.00 PRICE TOTAL SHARES OWNED DOLLAR AMOUNT INVESTED PRICES ARE FLUCTUATING TOTAL VALUE (DCA) $100,000.00 $190,000.00 $322,222.22 $402,020.20 $502,020.20 $502,020.20
  • 12. DCA vs. Lump Sum Investing Dollar Cost Averaging Example: Increasing Market DATE TOTAL VALUE 2000.00 1818.18 1666.67 1538.46 1428.57 $50.00 $55.00 $60.00 $65.00 $70.00 TOTAL $100,000 $100,000 $100,000 $100,000 $100,000 $500,000 2000.00 3818.18 5484.85 7023.31 8541.88 8541.88 $100,000.00 $210,000.00 $329,090.91 $456,515.15 $591,631.70 $591.631.70 PRICE TOTAL SHARES OWNED SHARES PURCHASED DOLLAR AMOUNT INVESTED PRICES ARE INCREASING 01/01/13 02/01/13 03/01/13 04/01/13 05/01/13
  • 13. DCA vs. Lump Sum Investing Dollar Cost Averaging Example: Increasing Market YOUR AVERAGE COST IS ACTUALLY STILL LOWER THAN THE AVERAGE PRICE OF THE STOCK Average Price of XXX Average Cost of XXX Your Average Cost $60.00 $58.54 $1.46 less than average price
  • 14. DCA vs. Lump Sum Investing …vs. Lump Sum Investing: Increasing Market DATE TOTAL VALUE (LUMP SUM) $50.00 $55.00 $60.00 $65.00 $70.00 TOTAL $500,000 0 0 0 0 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 $500,000.00 $550,000.00 $600,000.00 $650,000.00 $700,000.00 $700,000.00 PRICE TOTAL SHARES OWNED DOLLAR AMOUNT INVESTED PRICES ARE INCREASING TOTAL VALUE (DCA) $100,000.00 $210,000.00 $329,090.91 $456,515.15 $591,631.70 $591.631.70 01/01/13 02/01/13 03/01/13 04/01/13 05/01/13
  • 15. DCA vs. Lump Sum Investing Conclusion LUMP SUM INVESTING Declining Market Bound Market Increasing Market $387,381 $502,050 $618,506 $300,000 $500,000 $700,000 DOLLAR COST AVERAGING Does lump sum investing have a higher risk and higher reward? FOOD FOR THOUGHT A couple has $500,000 to invest. What are the possible ways to invest and what are the possible outcomes?
  • 16. Louie the Loser Think you have bad timing? Meet Louie the Loser© American Funds Distributors, Inc.
  • 17. Louie the Loser He cancelled his dental insurance the day before his root canal flared up. His vacation in the desert was rained out. He misses planes but catches colds. Why is he so happy? © American Funds Distributors, Inc.
  • 18. Louie the Loser Starting in 1987, invested $10,000 a year in a large cap fund Invested for 20 Years Chose the Worst Day Each Year — Market High Total Investment: $200,000 © American Funds Distributors, Inc.
  • 19. Louie the Loser …20 years later $10,000 a year, starting in 1987: Worst-day investments (market highs) Account value $637,185 Average annual total return 10.7% Best-day investments (market lows) Account value $772,705 Average annual total return 12.0% Market highs and lows based on Dow Jones Industrial Average. Cumulative volume discount applied when appropriate. Figures are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so you may lose money. Fund results are for Class A shares and reflect deduction of maximum sales charge (5.75%). © American Funds Distributors, Inc.
  • 20. What We Know for Sure It’s time in, not timing, the market that counts © American Funds Distributors, Inc. AI-20069
  • 21. Wealth Management Process CLASS 4: Managing Your Investments Manager Selection Financial Advisor Implementation Investment Policy Performance Monitoring
  • 22. Investment Professionals Investment Advisors Financial Advisors Financial Planners Financial Consultants Stock Brokers Discount Brokers Relationship Managers
  • 23. Investment Professionals Investment Professionals Assets vs. Transactions Fees vs. Commissions Counseling vs. Selling Process vs. Product
  • 24. Investment Professionals A good financial advisor should have the following three characteristics: Integrity Intelligence Motivation
  • 25. Investment Professionals What should you look for in an advisor? Level of Education Types of Clients Industry Experience Professional Memberships Applicable Market Knowledge Ability to Educate You
  • 26. Investment Professionals Sample Questions How many client relationships do you have? Describe your ideal client? What is your specialty? Do you hold any professional designations? Do you use an investment policy statement with your clients? May I see an example of an investment policy statement that you use? Describe the process you use with clients. Which responsibilities do you handle personally and which do you delegate? How do you evaluate performance? What performance should I expect from my investments? What level of risk/volatility should I expect?
  • 27. Investment Professionals Sample Questions Continued… How do you select managers, funds or individual stocks for my portfolio? What is your disciplinary record? How would I fit into your practice? What level of communication should I expect? Do you employ options and/or future strategies? How many brokerage firms have you worked for? If firm has been changed in the past 5 years, why did you change firms? What would you like to be doing in five years? Describe everything that I would be paying for to accomplish the investment programs you advise. Include commissions, expenses, account fees, transaction fees, 12b-1 fees, maintenance fees, etc.
  • 28. Investment Professionals The Stages of Service Evaluate current situations (every 12 months) Determine goals and objectives (every 12-24 months) Determine risk tolerance Asset allocation analysis (every 90 days) Manager and manager comparison analysis (every 90 days) Timing Tax issues (every 12 months) Will, Trusts, FLLC (3-5 years) Insurance (every 12 months) Monitoring (every 90 days) Rebalancing (every 90 days)
  • 29. Investment Professionals The Stages of Service EVERY 90 DAYS ANNUALLY EVERY 12-24 MONTHS EVERY 3-5 YEARS YEARS 0 1 2 3 4 ASSET ALLOCATION ANALYSIS MANAGER COMPARISON ANALYSIS MONITORING REBALANCING EVALUATE CURRENT SITUATION TAX ISSUES INSURANCE DETERMINE GOALS & OBJECTIVES WILL, TRUSTS, FLLC
  • 30. Investment Professionals Things to look out for: Trigger words like “Guarantee” or absolute terms like “never” Promising wealth without risk Margin or other leverage Extensive timing schemes Concentration in single stock, asset class, etc.
  • 31. Investment Professionals How do I check my investment advisor’s securities disciplinary record? Request from the Financial Industry Regulatory Authority (FINRA) a disciplinary record for your broker at: http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/
  • 32. Wealth Management Process CLASS 4: Managing Your Investments Manager Selection Financial Advisor Implementation Investment Policy Performance Monitoring
  • 33. Wealth Management Process Implementation Depending on the nature of your investment management team, some or all of the implementation process may be your responsibility. An experienced financial planning professional will likely have experience and expertise to provide advice in each “Stage of Service”; yet, they may not be able to give tax or legal advice without the proper licensure. In this case, they may be able to act as a quarterback for your professional “Circle of Trust”. YOU CPA / Accountant Insurance Agent Attorney Financial Planner Personal Banker
  • 34. Wealth Management Process CLASS 4: Managing Your InvestmentsManager Selection Financial Advisor Implementation Investment Policy Performance Monitoring
  • 35. The Investment Policy Statement What is an IPS? The means for turning your vision into reality. It is a living document that guides all investment decisions. Establishes a clear understanding between decision makers. Provides a meaningful basis for the evaluation. Enables the client, the advisor and portfolio managers to protect the fund from ad hoc revisions of sound long-term policy when short-term exigencies are most distressing and the policy is in doubt.
  • 36. The Investment Policy Statement Why is it important to develop an IPS? Puts structure to your goals Manager or Broker Succession Control Emotional Decisions Identifies Responsibilities Determine Asset Allocation Sets Up Performance Measurement Criteria
  • 37. The Investment Policy Statement Do I need an Investment Policy Statement? 1. What rate of return have your investments achieved over the last three years? Last five years? 2. How are the returns calculated? 3. Are you a fiduciary? 4. What procedures do you use to select your investments and/or your investment managers (or funds)? 5. What is your investment allocation? 6. What system, if any, do you use to time the market or to rebalance your portfolio? 7. What asset classes are permitted for your use? Which are restricted?
  • 38. The Investment Policy Statement Do I need an Investment Policy Statement? 8. What is your target rate of return and how was it determined? Is it a nominal rate or in relation to some benchmark, such as inflation or the S&P 500? 9. What level of risk is acceptable to you and how do you qualify that? 10. How much liquidity is required for your portfolio and how do you determine that level? If your response to any of the above was “I don’t know,” your answer was less than clear, or if you answered “yes” to question 3, then you need an Investment Policy Statement and this section of the class is intended for you.
  • 39. The Investment Policy Statement Q: Who is Responsible for its Development? A: The Client and the Investment Professional! For the Client, it serves the useful purpose of requiring thinking about preferences and expectations with respect to the market. For the Investment Professional, an IPS provides the basis for recommendations and for investment decisions in situations of uncertainty.
  • 40. The Investment Policy Statement Client Responsibilities Communicate your goals Determine your time horizon Gather personal financial data Consolidate holdings Know your fees and expenses Determine you risk tolerance
  • 41. The Investment Policy Statement Investment Professional Responsibilities Help in determining your risk tolerance Help determine long term goals Provide asset allocation recommendations Explain what appropriate fees and expenses should be Help select appropriate managers Set standards for performance reporting
  • 42. The Investment Policy Statement Seven Elements of a Well Constructed IPS 1. Executive Summary/Statement of Purpose 2. Investment Goals and Objectives 3. Statement of Responsibility 4. Investment Guidelines 5. Asset Mix Guidelines 6. Communication 7. Performance Review and Evaluation
  • 43. The Investment Policy Statement 1. Executive Summary/Statement of Purpose This section lays out the groundwork for the rest of the document. It first answers the question, “Who are you?” Next, it describes your broad aims. It also documents the intended purpose of the financial assets considered in the portfolio design. An explanation of the purpose of the IPS, objectives, and legal structure. The size of the portfolio, future payment information, and disbursement schedules. The tax status of the portfolio. A description of participant demographics. TO BE INCLUDED: Source: The Complete Guide to Managing a Portfolio of Mutual Funds, by Ronald K. Rutherford.
  • 44. The Investment Policy Statement 2. Statement of Responsibility This section describes the related parties involved in the IPS design and implementation process. It includes the investment advisor and the custodian. It may also include others such as the co-trustee, an auditor of the records, and those rendering tax and legal advice about the IPS. Source: The Complete Guide to Managing a Portfolio of Mutual Funds, by Ronald K. Rutherford.
  • 45. The Investment Policy Statement 3. Investment Goals and Objectives Time Horizon Risk Tolerance Asset Class Preferences Expected or Desired Rate of Return Lifestyle needs
  • 46. The Investment Policy Statement 4. Investment Guidelines Guidelines are established to identify the parameters within the investment strategy. This section is the appropriate place to articulate concerns and expectations, and acknowledge the uncertainties of investing in the capital markets. This section should include restrictions including prohibited transactions.
  • 47. The Investment Policy Statement 5. Asset Mix Guidelines Asset mix guidelines can include restrictions placed by the client or client circumstances on securities or investment categories. This is also the place to document restrictions suggested by the advisor. For example, an unrestricted asset allocation model may assign all financial assets to two or three categories or asset classes.
  • 48. The Investment Policy Statement 6. Communication Example-Investment Manager(s) Communication with the Trustees Provide monthly statements, quarterly portfolio valuations and transaction listings Meet at least (quarterly, semi-annually, annually) Review past investment performance, evaluate the current investment outlook, and discuss investment strategy Provide information regarding major changes in investment policy that may result in major investment strategy changes.
  • 49. The Investment Policy Statement 7. Performance Review 1. Up is good, Down is bad 2. Performance at or above goal 3. Performance within volatility tolerance 4. Relative Performance 5. Trend of Performance vs. Goal
  • 50. Sample Investment Policy Statement
  • 51. End of Sample
  • 52. Sample Portfolio Review Client: John & Jane Adams Period: 3/26/2012-3/26/2013 *IMPORTANT: All Investment Names, Indices, Performance Data, and Allocations are fake and do not represent any true investment and should not be considered investment advice.
  • 53. Activity Summary Period YTD Beginning Market Value (Including Bond Accrual) 1,053,842.89$ 1,153,551.35$ Contributions 40,000.00$ 10,000.00$ Distributions -$ -$ Transfer In/Out 50,000.00$ -$ Dividends and Interest 5,346.29$ 1,537.55$ Miscellaneous Charges (320.55)$ (85.00)$ Advisory Fees Paid (5,062.87)$ (1,255.20)$ Bond Accrual 160.00$ 50.00$ Market Value Increase/Decrease 88,750.65$ 68,917.71$ Ending Market Value (Including Bond Accrual) 1,232,716.41$ 1,232,716.41$ Gross Performance 8.433% 5.996% Returnsare GrossofFees, First 12 Month Returnsnot Annualized
  • 54. Allocation Summary $ % 459,756.00$ 37.3% 536,493.10$ 43.5% 150,588.31$ 12.2% 55,879.00$ 4.5% 30,000.00$ 2.4% Asset Category US Fixed Income US Equity International Emerging Markets Cash & Equivalents Check Actual % Compare to Target % Rebalance
  • 55. ConsolidatedHoldings Name Symbol Quantity Beginning $ Amount Price (3/25/13) Ending $ Amount Position Performance Portfolio Composition Category XYZIntermediateBondFund VWXYZ 2,015.55 250000 133.24$ 268,554.12$ 7.42% 22% USFixedIncome ConvertibleBondFund BBBBB 1,500.20 30000 22.15$ 33,232.46$ 10.77% 3% USFixedIncome LMNOPMortgageBackedSecurityFund LMNOP 1,011.55 50000 55.80$ 56,446.21$ 12.89% 5% USFixedIncome MunicipalBondFund MUNIB 788.55 100000 128.75$ 101,523.21$ 1.52% 8% USFixedIncome Benchmark:USAggregateBondIndex 7.20% GenerixGrowthFund GGROW 2,525.00 200000 115.25$ 291,005.45$ 20.50% 24% USEquity HighDividendValueFund VALEW 3,112.55 200000 74.85$ 232,987.65$ 16.49% 19% USEquity SprinklerCompanyofAmericaStock SCA 150.00 20000 83.33$ 12,500.00$ -37.50% 1% USEquity Benchmark:USLargeCapEquityIndex 15.30% GlobalEx-USALargeCapEquityFund GLOBE 4,005.33 120000 33.72$ 135,056.20$ 12.55% 11% InternationalEquity RussianSocialMediaCompany RUSS 200.00 15000 77.66$ 15,532.11$ 3.55% 1% InternationalEquity Benchmark:InternationalEquityIndex 9.60% EmergingEconomies Fund EMECF 1,009.56 50000 55.35$ 55,879.00$ 11.76% 5% EmergingMarkets Equity Benchmark:EmergingMarketsEquityIndex 10.50% MoneyMarketFunds MMFXX 17,842.89 18842.89 1.00$ 30,000.00$ 0.00% 2% Cash&Equivalents 1,053,842.89$ 1,232,716.41$ 8.43% 100% Class 2 Flashback: Most Returns are Derived from Asset Allocation, make sure to track the performance of your individual investments vs. the Benchmark for that asset class.
  • 56. Index Comparison - Returns areGross of Fees - First 12 Month Returns arenot annualized Period(3/26/12- 3/26/13) QTD YTD 1 Year 3 Year 5 Year 10 Year Inception Client Portfolio 8.43% 5.99% 0.0599 8.43% 5.51% 3.78% 5.75% 6.22% BenchmarkPortfolio* 6.25% 4.75% 0.0475 6.25% 5.60% 3.90% 4.50% 5.26% *50%USLargeCapIndex /10%International EquityIndex /40%Aggregate BondIndex Portfolio Value vs. Benchmark Since Inception -It can be easy to focus on how your portfolio compared to popular indices, like the S&P 500, but your portfolio’s benchmark should be blended based off your target risk and return profile.
  • 57. Account Detail - John Smith IRA Name Symbol Quantity Beginning $ Amount Price (3/25/13) Ending $ Amount Portfolio Composition Category XYZ IntermediateBond Fund VWXYZ 2015.55 250,000.00$ 133.24$ 268,554.12$ 22% US Fixed Income Sprinkler Company of America Stock SCA 150 20,000.00$ 83.33$ 12,500.00$ 1% US Equity Russian Social Media Company RUSS 200 15,000.00$ 77.66$ 15,532.11$ 1% International Equity Emerging Economies Fund EMECF 1009.56 50,000.00$ 55.35$ 55,879.00$ 5% Emerging Markets Equity 335,000.00$ 352,465.23$ 29% Account Detail - John and Betty Smith Joint Tenants with ROS Name Symbol Quantity Beginning $ Amount Price (3/25/13) Ending $ Amount Portfolio Composition Category ConvertibleBond Fund BBBBB 1500.2 30,000.00$ 22.15$ 33,232.46$ 3% US Fixed Income LMNOP Mortgage Backed Security Fund LMNOP 1011.55 50,000.00$ 55.80$ 56,446.21$ 5% US Fixed Income Municipal Bond Fund MUNIB 788.55 100,000.00$ 128.75$ 101,523.21$ 8% US Fixed Income Generix Growth Fund GGROW 2525 200,000.00$ 115.25$ 291,005.45$ 24% US Equity High Dividend ValueFund VALEW 3112.55 200,000.00$ 74.85$ 232,987.65$ 19% US Equity Global Ex-USA LargeCap Equity Fund GLOBE 4005.33 120,000.00$ 33.72$ 135,056.20$ 11% International Equity Money Market Funds MMFXX 17842.89 18,842.89$ 1.00$ 30,000.00$ 2% Cash & Equivalents 718,842.89$ 880,251.18$ 71% -Some investments make more sense to be in certain types of accounts. Higher cash balances in taxable checkwriting accounts, tax-advantaged investments in taxable accounts, high-income investments in non- taxable accounts, etc.
  • 58. -Income generation and cash flow can be extremely important, depending on where you are in your financial life cycle. Many reports will estimate future income based off of current yield figures. Estimated Income Asset Symbol Quantity Price (3/25/13) Current Value % ofAssets Annual Income Rate Annual Income Total Current Yield XYZ IntermediateBondFund VWXYZ 2,015.55 133.2411104 268,554.12$ 22% 0.34 8,190.90 3.05% ConvertibleBondFund BBBBB 1,500.20 22.15201973 33,232.46$ 3% 0.098 186.10 0.56% LMNOP MortgageBacked Security Fund LMNOP 1,011.55 55.80170036 56,446.21$ 5% 0.35 1,749.83 3.10% MunicipalBondFund MUNIB 788.55 128.7466996 101,523.21$ 8% 0.22 2,791.89 2.75% GenerixGrowth Fund GGROW 2,525.00 115.2496832 291,005.45$ 24% 0.282 2,240.74 0.77% High Dividend ValueFund VALEW 3,112.55 74.8542674 232,987.65$ 19% 0.394 3,098.74 1.33% Sprinkler Company of AmericaStock SCA 150.00 83.33333333 12,500.00$ 1% 0.075 50.00 0.40% GlobalEx-USALargeCap Equity Fund GLOBE 4,005.33 33.71911927 135,056.20$ 11% 0.355 2,822.67 2.09% Russian SocialMediaCompany RUSS 200.00 77.66055 15,532.11$ 1% 0.2 194.15 1.25% Emerging Economies Fund EMECF 1,009.56 55.34985538 55,879.00$ 5% 0.469 961.12 1.72% Money MarketFunds MMFXX 17,842.89 1 30,000.00$ 2% 0.003 75.00 0.25% Totals 1,232,716.41 100% 22,361.15 1.81%
  • 59. Reaching Your Goals Financial Independence Financial independence is when you can maintain your desired lifestyle for the remainder of your life without the worry of money. LIFESPAN INCOME PRODUCTIONCAPACITY DESIRED LIFESTYLE FINANCIAL INDEPENDENCE FINANCIAL DEPENDENCE
  • 60. Reaching Your Goals “Whoever acquires knowledge but does not put it to use is as one who plows but does not sow.” -Sa’di

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