1. Women and Investing
Smart Women
Finish Rich
Presented by
Lisa Marie Brugman
CA Insurance License # 0C97144
Insurance Agent for
Advisors Wealth Management, Inc.
New York Life Insurance
Registered Representative
Owner, Financial Advisor
for NYLIFE Securities, LLC.
Rep/Agent # 084584
Securities offered through NYLIFE Securities, LLC.
Member FinRA, SIPC
Blue Coast Financial Advisor
Independent Owner
4. Stocks
Stocks are ownership
A Corporation issues stock
When an investor purchases stock, she becomes
part owner of the corporation.
Stocks as an investment
An investor purchases a share of stock; the
price of the share increases; the investor sells it.
I.e. –You buy a share of Disney at $3 /share and
then sell it for $8 /share; You made $5 /share.
This is Capital Appreciation; Buy low Sell high
An investor holds her shares; the Corporation
declares a profit and distributes a portion to the
share holders, (investors).
When profits are distributed by a corporation;
it is called a dividend.
5. Bonds
Bonds are loans (or debt)
The government, its agencies, or municipalities
can issue bonds.
Corporations can issue bonds.
If a corporation wants to raise capital, and it doesn’t want to
issue more stock, it may make a bond offering.
A bond offering may be $1000 bond at a fixed rate,
due in a set number of years.
I.e. XYZ Co. -$1000, 6% due in 10 years
-An investor purchases a bond for $1000; she will
receive interest payments of 6% each year; in 10 years,
the investor can cash in her bond for her $1000 investment.
The investors lets XYZ Co. “borrow” $1000 for a
10 year period. In return the investor will receive income
of 6% a year during that time period.
6. Stocks
&
Bonds
Why should you invest in stocks and bonds?
Over the long run, stock and bond investments have
out-paced inflation.
In a portfolio, stocks provide growth and a hedge against
inflation; bonds provide stability and income.
An accurate assessment of your goals, needs, time
frames, and risk tolerances are needed to develop
the best investment strategy and create the right
portfolio balance of stock and bond investments.
7. Other Investments:
Mutual Funds
A mutual fund is a pooling of investor dollars to purchase
stocks, bonds, or both in a portfolio to meet a specified
investment goal.
An investor can invest a fixed amount each month; as little
as $25 per month.
MFs can help diversify your investment portfolio,
- a typical fund holds an average of 125 companies1.
Convenience
Monthly or quarterly statements
Automatic reinvestment
There are over $7 trillion invested in the stock market through
Mutual Funds2.
1Morningstar
2Investment Company Institute
8. Other Investments:
Annuities
Are an Insurance Company Product
Fixed Annuities
A contract between an annuitant (investor owner) and an
insurance company for a specific rate of return on an
investment made.
This investment is guaranteed not to lose the investment.
Variable Annuities
A contract between an annuitant and an insurance company
The investment can be made in fixed accounts or variable
sub-accounts.
A sub-account is a pooling of investor dollars to purchase
stocks, bonds, or both in a portfolio to meet a specified
investment goal.
This investment in NOT guaranteed. The investments
results depend on the performance of the sub-accounts.
10. Inflation:
5% Historical Inflation Rate
from 1970 - 2001
2.7% Inflation Rate
for the last 10 years
Source: Ibbotson Associates
11. Growth of $100,000
at Historical Rates of Inflation
Assuming 10-Year Inflation Rate
$800,000 Assuming 30-Year Inflation Rate
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
2002 2022 2032 2042
Source: Ibbotson Associates, 10-year historical inflation rate of 2.7%, 30-year historical inflation rate of 5.0% from 1970-2001.
Assumes initial investment of $100,000 from 2002-2022. The above example is for illustrative purposes only, and is not meant to
represent the performance of any particular Dreyfus investment.
12. Projected Life Expectancies
Percentage of People Living to Age . . .
56%
42%
24%
10%
80 85 90 95
Age
Source: National Center for Health Statistics, 2000.
16. Living in Retirement
$4,261,695
Ending Assumptions:
Value For 25 years at:
Actual returns of
Ibbotson Large Cap
Stocks
$203,000 5% Post Retirement
$100,000
Income with a 3%
Today Retirement inflation rate
Income
Current
Income
=
Based on a 3% rate of inflation, a current income of $100,000 today would be the equivalent of an income of $203,000 in 25 years. A $100,000 investment in
1975 in the Ibbotson Large Cap Stock category, represented by the S&P 500 Index, would have grown to $4,261,695. The S&P 500 is an unmanaged index
and a leading measure of overall stock market performance. Investors cannot invest directly in any index. Past performance is not indicative of future results.
The above example is for illustrative purposes only and is not meant to represent the performance of any particular Dreyfus investment.
17. Monthly Investment Amount Required to
Generate $60,000 Annual Income
Monthly Investment
$25,000
$20,000
$15,000
$10,000
$5,000
$0
5 10 15 20 25 30 35 40
Years Before Retirement (at age 60)
Source: PaineWebber: The Big Shift Research Report; February 8, 1998. Assumptions: 7% pre-retirement investment return, 5%
retirement income, 3% inflation.
18. Timing the
Market is Difficult
S&P 500 Annualized Returns for the period 9/81 - 12/01
10.7%
8.0%
6.2%
4.6%
3.2%
1.8%
All Minus Minus Minus Minus Minus
Trading 10 Best 20 Best 30 Best 40 Best 50 Best
Days Days Days Days Days Days
Source: Zweig Consulting, LLC. The S&P 500 is an unmanaged index and a leading measure of overall stock market performance. Investors
cannot invest directly in any index. Past performance is not indicative of future results.
19. Gains and Losses
of the S&P 500
1930 - 2001
Holding Period 1 Year 5 Years 10 Years 15 Years 20 Years
% of time investors
lost money 26% 5% 1% 0% 0%
% of time investors
lost more than 10% annually 13% 1% 0% 0% 0%
% of time investors lost
between 10% and 0% annually 14% 5% 1% 0% 0%
Percent of time investors earned
between 0% and 10% annually 17% 30% 38% 37% 30%
Percent of time investors earned
more than 10% annually 56% 64% 60% 63% 70%
Source: Standard & Poor’s. Investors cannot invest directly in the S&P 500 Index. The S&P 500 is an unmanaged index and a leading measure of
overall stock market performance. Investors cannot invest directly in any index. Past performance is no guarantee of future results.
20. Time Has Diminished the Risk of Loss
100% Stock Portfolio
1-Year Holding Period 10-Year Holding Period 15-Year Holding Period
4% 0%
26%
74% 96% 100%
Gain Loss
Source: Standard & Poor’s 1926-2001. In any 1-year holding period, over the past 75 years, there was a gain in 74% of the periods and a loss in
26% of the periods. In any 10-year holding period, over the past 75 years, there was a gain in 96% of the periods and a loss in 4% of the periods.
In any 15-year holding period, over the past 75 years, there was a gain in 100% of the periods. Stock portfolio measured by the performance of
the S&P 500 Index, an unmanaged index and a leading measure of overall stock market performance. Returns from actual investments will vary,
and there can be no guarantee that any investment product will achieve any specific rate of return. Investors cannot invest directly in any index.
21. Time Has Diminished the Risk of Loss
60% Stock / 40% Bond Portfolio
1-Year Holding Period 10-Year Holding Period 15-Year Holding Period
0% 0%
23%
77% 100% 100%
Gain Loss
Source: Standard & Poor’s 1926-2001. In any 1-year holding period, over the past 75 years, there was a gain in 77% of the periods and a loss in 23% of the
periods. In any 10- or 15-year holding period, over the past 75 years, there was a gain in 100% of the periods. Stocks measured by the performance of the
S&P 500 Index, an unmanaged index and a leading measure of overall stock market performance. Bonds measured by long-term treasuries with maturities of
10 or more years. Assumes the portfolio is rebalanced every year. Returns from actual investments will vary, and there can be no guarantee that any
investment product will achieve any specific rate of return. Investors cannot invest directly in any index.
22. The Time Value of Money
3000000
2500000
Account Values
2000000
Age
Investors
1500000 Janet
Susan
1000000
500000
0
1
4
7
10
13
16
19
22
25
28
31
34
37
40
43
46
49
52
55
Age in Years
Janet contributed $2000/ yr. from age 19 yrs to 26 yrs. Susan contributed $2000/ yr. from age 27 yrs to age 65. Assuming a consistent
10% hypothetical growth rate. Returns however, on all investment products will fluctuate. Investment return and principal value will
fluctuate and your investment value may be more or less than the original invested amount. This hypothetical illustration is for
informational purposes only and is not meant to forecast or imply the performance of any investment vehicle.
23. Be Always Building your Security Basket
Keep an Emergency Fund
6- 8 months salary
in a liquid account
**Remember this is for emergencies
Plan your Estate
Prepare a Will or Living Trust
Keep it up to date
Make sure beneficiaries are correct and current
Be sure your Family knows its location
Have it reviewed by an attorney periodically
Make sure you’re Properly Insured
Health Insurance
Life Insurance
Disability and Long Term Care
Home owners Insurance
24. Continue to Build your Dream Basket
How to get to your dream basket goal:
Time Frame Investment Type
Less than 2 years Money Market
2 – 5 years Bonds, Bond Fund
5 – 10 years Balanced, Stock Fund
10 + years Growth Stock Fund
25. Where do I get started?
Talk to a professional
She can help you determine
your future need
your savings ability
your risk tolerance
She can help you understand ALL your choices
Money markets, annuities or mutual funds?
Retirement plan, mid-term or short-term goal
Insurance coverages
Trusts and Estate Planning
26. Talk to a Professional!
Lisa Marie Brugman
CA Insurance License # 0C97144
35 year, Whittier Resident
Advisors Wealth Management, Inc.
PO Box 11285
Whittier, CA 90603
888-987-WEALTH (9325)
Insurance Agent for
New York Life Insurance Blue Coast Financial Advisor
Registered Representative Independent Owner
for NYLIFE Securities, LLC.
Rep/Agent # 084584
Securities offered through NYLIFE Securities, LLC.
Member FinRA, SIPC