Swm free report

SW
M
Sorensen
Wealth Management

The (5) Dangers that May Cause you to Lose 50%
of your Net Worth in One Day

and (4) of them have nothing to do with the Stock Market!

Index

The (5) Dangers that May Cause you to Lose 50% of your Net Worth in One Day
and (4) of them have nothing to do with the Stock Market!

1. Dying Without a Formal Estate Plan/Will . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-2
Index pages

2. Unexpected, Unprotected Misfortune . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-8

3. Untimely Death of a Key Person in . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-10
a Privately Held Business

4. Divorce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1-14

5. Upheaval in the Stock Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15-17

ii

Dying Without a Formal
Estate Plan/Will 1

Dying Without
a Formal Estate
Plan/Will
Thedate ofway to optimizedoesn’tfinancesthattoway. Ourthe calendar diminish
a
best
death- but it
your
work
is get out and pick
birth certificates don’t
have expiration dates. Preparing for the inevitable will significantly
the stress and challenges your family will most certainly face.
If you die without a formal estate of other matters. Most importantly,
plan, your estate tax exemption proper estate planning ensures
may not be properly applied and that the family and friends of the
could result in tax dollars being paid deceased are protected. In order to
to the government unnecessarily. understand the urgency of proper
Each American has an estate tax estate planning, let’s take a look
exemption of $5 million through 2012. at the estate of Elvis Presley after
If a surviving spouse files a properly his death. Upon his death in 1977,
completed tax return, even when Presley’s estate was worth an
no estate tax is due, he or she can estimated $10 million. However, Elvis
later use his or her unused estate did not utilize proper estate planning
tax exemption, plus the unused methods. After probate, legal
exemption of the deceased spouse fees, and estate taxes, his estate
decreased by a devastating 70%.
Estate planning involves the Consequently, this left his family with
process of which an individual or only $3 million. This was an extremely
family arranges for the transfer of unfortunate financial loss and could
property at death, and a variety have been easily avoided.

1 one
Securities offered through Triad Advisors, Member FINRA, SIPC. Advisory services offered
through Sorensen Wealth Management (SWM). SWM is an Independent Registered Investment
Advisor and is not affiliated with Triad Advisors. CA Insurance License No. 0778771

Dying Without a Formal
Estate Plan/Will 2

Dying Without
a Formal Estate
Plan/Will The lack of a formal estate plan, fees can consume between six
regardless of the income level or and ten percent of your estate.
net worth of an individual, can Furthermore, that percentage is
cause extreme financial loss and calculated prior to any deduction
unexpected hardship for surviving or liens deducted from the estate.
heirs. Proper estate planning includes In addition, proceedings of probate
the following: are considered a matter of public
record. Therefore, anyone can
» Implementation of tax planning/ go to the county courthouse and
tax saving strategies discover every detail of your estate.
» Ensuring transfer of wealth and Fortunately, there are effective
specific personal property estate planning strategies that may
» Appointing guardians for minor be put in place to avoid this probate
children process altogether.
» Establishing trusts for minor
children Durable Power of Attorney for
» Naming trustees Health Care
» Naming a personal
representative to administer your Have you thought of who will
estate make medical decisions for you
» Planning for disability or on your behalf if you become
incapacity incapacitated? You may want
to consider a Durable Power of
Proper Estate Planning Avoids Attorney for Healthcare. This
Probate important legal document authorizes

1
the agent you designate to make
Probate is a legal process that healthcare decisions for you.
occurs after someone passes. It
usually consists of proving that the It is critical that you ensure that
deceased’s will is valid, identifying you have a proper estate plan in
and appraising the deceased’s place to protect your family and
property, paying outstanding debt loved ones from the risk of losing
and taxes, and distributing the half your net worth in one day.
property per the will or state law. One of the benefits of working with
our firm is our network of qualified
Probate is expensive and takes experienced estate planning
a considerable amount of time. The attorneys that can assist in putting

one
average settlement time frame lasts a new plan in place or updating
anywhere from nine months to two your current plan if necessary. Call
years! According to the American us today and we will assist you in
Bar Association, depending on the determining which professional is
state, probate and administrative appropriate for your unique situation.


Unexpected,
Unprotected Misfortune 3

Unexpected,
Unprotected
Misfortune “The only thing that is constant is
change” - Heraclitus
W e all know life is constantly changing. Expect the unexpected. You can
never be 100% prepared for tragedy, but you can significantly reduce
your risk. Here’s how…
According to Genworth Financial,
Long Term Care 40% of people currently receiving
Did you know that recent studies long term care services are under
indicate that 70% of people age the age of 65. These people need
65 or older will need long term long term care assistance due to
care services at some point in their diseases, disabilities, and critical
lifetime? In addition, 40% of people mental conditions.
currently receiving long term care 2. My family will take care of me
services are between ages 18 to
64 (Genworth Financial). With the The majority of people rely on
steady increase of healthcare costs friends or family to care for them
and life expectancy, more and more in the unfortunate event that they
people are faced with the reality require long term care assistance.
of needing long term care at some Unfortunately, people don’t realize
point in their lives. It is estimated that providing long term care for
that 6 out of 10 people in the United someone is not only exhausting but
States will need long term care extremely time consuming. Therefore,

2
during their lifetime (longtermcarelink. when planning for long term care,
net). However, far too many you must consider if your friends or
people still depend on government family members will have the time
programs to provide this support and funds available to take care of
to them that most likely will not be you. More importantly, you need to
there when they need it. ask yourself if you want to place that
burden upon your loved ones?
Five Common Myths about Long
Term Care Insurance:
1. I’m too young to need Long Term
Care Insurance

two

Unexpected,

Unexpected,
Unexpected,
Unprotected
Unprotected
Misfortune
Misfortune 3. Medicare and Medicaid will Homemaker services $48,620
cover the cost of my long term Home health aide $51,480
care bills Private, one bedroom assisted living
facility $42,000 Private room nursing
Unfortunately, these programs will
home care $93,000
supplement a small percent of the
cost of long term care, but are not
As you can see, the costs of long
intended to cover care that assists
term care are extensive. Failure to
individuals with their activities of
plan for this in the future can result
daily living for any long period of
in great sacrifice from friends and
time.
family members. Furthermore, it is
4. Health insurance will kick in to help puzzling that people will purchase
cover my bills for long term care fire insurance for their home before
they purchase long term care when
Unfortunately, health insurance rarely
research has indicated that long
covers ongoing persistent needs.
term care is 600 times more likely
5. I have enough money saved to to be used than the fire insurance.
provide for my own long term care What about auto insurance? Long
assistance term care is 120 times more likely
to be used than auto insurance and
Before relying on your own personal
long term care services are 20
savings as a method of long term
times more expensive!!! We do not
care planning, it is important to
recommend that you go without fire
consider the average annual costs
or auto insurance. However, we do
of long term care in California
recommend that you consider long

2
according to Genworth Financial:
term care insurance as a significant
component of your financial plan.

two

Unexpected,

Unexpected,
Unprotected
Misfortune Replacing the loss of personal in a lump sum with the insurance
income through life insurance proceeds such as, funeral and estate
expenses, tax bills, home mortgage,
Have you ever thought about kid’s educational fund, etc..
what would happen to your family » Ongoing financial needs: These
if you were to pass away during are needs your family may face in
your prime working years? What their immediate future. How much
challenges would they face if they money will your family need on an
did not have your income to rely ongoing basis to maintain the lifestyle
upon? How would their lives be they are accustom to?
affected by this tragedy? These are
all pertinent questions that need to In addition, it is also important
be asked to ensure that your family to plan for the adjustment period
is properly protected should a crisis your family will encounter upon
arise. your passing. Remember, your
spouse may need to take a leave of
Life insurance is a simple absence or cut back on his/her job
solution to protect your family in the to spend more time with the children
unfortunate event of your passing. or deal with the grief of your
But what type of life insurance passing. So how do you determine
should you purchase and how the appropriate amount of life
much? Life insurance is an integral insurance to purchase? One method
component of your financial plan is the Multiple of Income Approach –
and it is crucial that you purchase Generally, you need to have five to
the appropriate amount of coverage seven times your annual income as a

2
for your family’s unique needs. good starting point for life insurance
The first step in shopping for life coverage. However, this may vary,
insurance is to identify the two major depending on your life factors (age,
financial needs of your family: income, marital status, children, cost
of living, etc.), so it is important to
» Large cash needs: These are consult a professional to assist you in
items that you would want to be paid this crucial investment.

two

Unexpected,

Unexpected,
Unprotected
Misfortune If you have not had a life So the question remains, can
insurance replacement analysis in parents be financially responsible
the past few years, or if you have, for the negligence of their child?
and some of your significant life Yes, parents are responsible for the
factors have changed, you need to negligence of their children even
consult with a professional to ensure if they are over the age of 18.
that you have sufficient coverage Furthermore, many parents wonder
in force. While you can’t guarantee if they have “full coverage” if that
that you will always be around to is enough coverage”. It is important
earn an income, you can guarantee to understand the difference
financial security for your family in between “full coverage” and
the unfortunate event of your passing “enough coverage”, especially in the
during your prime income earning circumstance of teenage automobile
years. accidents and negligence.
Umbrella Policies In order to understand the
urgency of purchasing “enough
Did you know that according
insurance”, consider the following
to the National Highway Traffic
potential injury claim described by
and Safety Administration (NHTSA),
William R. Richardson, President of
“motor vehicle crashes are the
the Teen Victim Impact Program, Inc.
leading cause of death for American
DBA :
Teenagers, with teens involved in
three times as many fatal crashes as Your 17-year-old child is driving
other drivers. Approximately 3,000 their car and they hit a college-aged
teenagers die in car accidents in student head-on. The injured victim

2
the United States every year, and requires life flight from the scene of
1 in 5 sixteen-year-old drivers in an the accident to the nearest trauma
accident in their first year of driving?” center. Upon arrival, the victim
requires intensive care stabilization
Parents must be aware of the
for 10 days before surgery can be
consent they are signing when their
conducted to repair a compound
teenagers begin to drive. Texting,
fracture to her tibia. Doctors also
drinking, and passenger distractions
have to wait for the brain swelling
cause a disturbing amount of
to diminish so that they can begin
fatalities, and a legal battle is the
conducting extensive neurological
last thing a parent wants to be
testing to determine the extent of a

two
challenged with. Forbes recently
closed-head injury. The victim also
reported that “texting while driving
has multiple face lacerations as well
causes 1 teen deaths every day.”
1
as deep cuts throughout other parts


Unexpected,

Unexpected,
Unprotected
Misfortune of her body as a result of hitting the swim as a result of her vision issues
windshield prior to being ejected and normal activities of daily living
from the vehicle. The cuts require are impaired. Although she can
the use of sutures too numerous to move her arms and legs, she has
count and, upon healing, will result permanent numbness and tingling
in permanent disfiguring to her in her extremities and her doctors
face and other body parts. She lost determine that it’s too dangerous to
two fingers on her left hand (one operate on her spine as a result of
of them being her ring finger) and, concern over severing her already
upon discharge, will require home compromised spinal cord. She
healthcare and, when able, will will have to learn to live with the
require physical therapy at least changed sensations. It’s too bad, too,
twice each week for eight months. because the victim was a sophomore
Although the victim may walk again, at Georgia Tech with a 3.9 GPA in
she will walk with a permanent limp Chemical Engineering and plans to
and will require a cane. In addition, enter the military to satisfy her ROTC
this may require a hip replacement scholarship obligation. Unfortunately,
surgery in 20 years as a result of claims like this are made every day.
compensation techniques. Before
So what does this mean to
her discharge from the hospital,
the parents of this 17-year-old
the attending physicians ultimately
child at fault for this accident?
diagnose the extent of her closed-
Insurance companies are in most
head injury. Testing confirms that the
cases, obligated to pay the amount
victim has lost all short-term memory.
equivalent to the liability limits of the
She has also lost her ability to taste

2
insurance policy selected. Therefore,
as a result of trauma to her head.
if the driver responsible only had
She also has a permanent double
a policy with $50,000 in liability
vision that requires special corrective
limits, the parents of that driver are
lenses. Of course, she can no longer
responsible for the remainder of

two

Unexpected,

Unexpected,
Unprotected
Misfortune what the insurance company does
not cover. Therefore, the parents may
is full of surprises which is why it is
critical that you ensure your family
be required to sell property, garnish and your assets are protected
wages, or sell off assets to cover the should an unfortunate event arise.
remaining expenses to ensure that One of the benefits of working
the victim is made whole. Therefore, with our firm is our network of
if you don’t ensure that you have qualified experienced insurance
“enough insurance” you may be professionals that may evaluate
putting your life saving’s and all of your current insurance policies and
your hard work at risk. future needs in order to determine
the appropriate protection for you
Having “enough” insurance in
and your family. Call us today and
place will protect you from the
we will assist you in deciding which
possibility of losing half of your net
professional is appropriate for your
worth in one day. We all know life
unique situation.

2 two

Untimely Death of a Key
Person in a Privately Held Business 9

Untimely
Death of a
Key Person
in a Privately
B usinesses are really made-up of a network of individuals who provide
value to raw resources. In small businesses the web of resources is quite
small so when a key person suddenly exits the day-to-day operations, the
Held Business business, the families, the employees and the clients all suffer!
Did you know that the value of Death of the Co-Owner
a family’s business may be reduced
This will affect business operations
dramatically by the death of a key
as the search for a qualified
person? In some cases, it may be
replacement begins. In addition,
necessary to sell the business to
there may be conflicts that arise
create the liquidity necessary to pay
between the surviving owner and
the estate taxes, which generally are
the deceased co-owner’s spouse.
due in nine months after the owner’s
The deceased’s spouse may want/
death. Key man insurance can help
need money and if the owner
this, consider the scenarios below:
does not have the funds to provide
Death of the Owner they will have to be taken directly
from the business. Furthermore, the
Imagine… as the business begins
deceased’s spouse may become the
to experience the aftermath of this
new co-owner.
tragic loss, the following will begin
to unfold: Loss of income flow to Death of a Key-Person
surviving spouse, business assets
Many businesses have a key
must be liquidated for pennies on
employee or person that they
the dollar, employees lose their jobs
heavily rely on. What if this person

3
and their families begin to endure
suddenly passes away? Imagine
financial challenges.
the costs associated with finding a
replacement for this loss? Solutions?

three

Untimely Death of a Key
Person in a Privately Held Business 10

Untimely
Death of a
Key Person Buy-Sell Agreement Key-Employee Insurance

in a Privately This agreement involves the sole
owner and key-employee and is
The cost the key-employees
death will inflict on the business
Held Business funded with life insurance. In the is estimated and life insurance is
unfortunate death of the owner, it purchased, in that amount to insure
is agreed that the business will then the life of that key-employee. This
be sold to the key-employee at a policy is owned by the company
stated or formula-based value. This itself and all proceeds upon the
purchase price is funded through death of the insured are tax-free.
a life insurance policy owned by If you have established a business,
the key-employee, insured on the it is highly advised that you take
owner’s life. In order to ensure a look at these critical steps in
that the employee can afford the protecting yourself, your family, and
premiums for this life insurance your business from the danger of
policy, they are compensated with a losing 50% of your net worth in a
bonus equal to the premium amount. single day.
Therefore, in the event of the owner’s
If you own a business, it is
death, the employee purchases
imperative that you review your
the business and it continues as is,
existing plan should an unfortunate
and remains in-tact. The deceased
event arise to ensure that you will
owner’s spouse then receives a lump
not lose 50% of your net worth
sum payment for the business and
in a single day should yourself,
everything is settled.
business partner, or key employee

3
Cross-Purchase Buy-Sell Agreement unexpectedly pass away. One of
This agreement between two the benefits of working with our
partners is also funded through firm is our access to a network of
proceeds from life insurance. The qualified experienced insurance
partners buy life insurance policies professionals that may evaluate your
on one another with face amounts current plan in place and provide
equal to the value of the other’s recommendations if necessary. Call
share of the business. Upon the us today and we will assist you
death of one of the partners, the in deciding which professional is
business is purchased and a lump appropriate for your unique situation.
sum paid to the deceased partner’s

three
spouse by the surviving partner from
the life insurance proceeds. Again,
the business remains in-tact and
continues on.


Divorce
11

Divorce

W hen you are married, your net worth is the total household assets.
Guess what happens to your net worth in a divorce? You only get
half - in actuality, one of you ends up with less than half. Then add to the
equation the 3rd person in every divorce- your lawyer. Did you know that
today in the United States 40-50% of first marriages end in divorce and 60%
of second marriages will end in divorce?
In an article on marriage and marriage each year. “The average
divorce, author Marty Friedman cost of a divorce can cost anywhere
reviews some interesting statistics from several hundred to several
on married people who reach million dollars.
anniversaries:
#1 Cause of Divorce
» 5th wedding anniversary – 82%
Ironically, the number one cause
» 10th wedding anniversary – 65% of divorce according to an article
» 25th wedding anniversary – 33% by Alex Veiga from the Huffington
» 35th wedding anniversary – 20% Post, is money. It is well known that
» 50th wedding anniversary – 5% couples need to maintain a close
With divorce becoming watch on their own financial habits
increasingly more common in the in order to prevent financial troubles
United States, it is important to in a relationship. Failure to do so may
examine the average costs of result in relationship troubles and
divorce and what that means to ultimately divorce. It is imperative
couples. According to staff writer that couples uphold consistent open
Leah Hoffman for Forbes.com, nearly communication about their finances.

4
one million Americans end their

four

Divorce
12

Divorce

The following are seven steps experts Don’t split costs 50/50
recommend to prevent potential Everyone knows that money is
marital financial issues: power. However, splitting costs right
down the middle in a marriage
Disclose financial records – share
can foster feelings of resentment
statements for bank accounts, credit
when one spouse receives a higher
cards, student loans, retirement
income than the other. It is important
accounts, credit reports, FICO scores
that each spouse hold equal say in
etc. This affords couples with the
money making decisions.
opportunity to determine what you
own and what your debts are so
Talk about spending
everything is out in the open.
It is important to understand your
spending differences. One may
count every penny when their
Discuss Financial Goals spouse parts easily with money due
Ensure that your life goals and to shopping habits. This can prevent
necessary financial commitments are future financial related issues.
aligned with one another. Discuss
short and long-term goals, including Treat your money as “our money”
paying off credit card debt, and Anthony Chambers, clinical
draft budgets that set you on a clear psychologist at the Family Institute
path toward your goals. at Northwestern University,
recommends that couples arrange
Keep your credit cards separate for their paychecks to be directly
In order to avoid potential impact to deposited into a joint account that
your credit rating, keep your credit

4
is used to pay shared expenses. If a
cards in your own name with your spouse feels they need some of their
spouse as an authorized user. This own “play” money in a separate
also establishes some accountability, account, ensure that the funds come
as authorized users are able to from the joint account so that both
check account balances and track spouses know where the money is
spending on the card. going.

four

Divorce
13

Divorce

Divorces are expensive! Pre-Nuptial Agreements
According to Livestrong.com, a
two-day trial can cost as much as Have you ever thought about the
$25,000! Furthermore, lawyers idea of a prenuptial agreement?
typically cost between $150 and This has often been considered
$1,000 an hour. However, there are limited to only the rich and famous,
some alternative options: but today this agreement can go
beyond the preservation of assets
1. Don’t Get Divorced before the marriage. Furthermore,
2. Plan before you get married according to an article from the
Harvard News Office, Beth Potier
3. If you must get divorced, do these
explains that this agreement may
things:
represent an exit agreement far
Use a mediator instead of an closer to the couples’ wishes than
attorney – using a mediator can the court-ordered divorce. An
significantly reduce the cost of a excellent prenuptial agreement can
divorce. In comparison to the cost of even exert a positive force on a
divorces with an attorney involved, healthy marriage. However, only 5
(around $25,000), a mediation to 10 percent of marrying Americans
divorce only costs around $5,000. enter into prenuptial agreements.
Request to pay your lawyer a flat Heather Mahar, a fellow at the
fee – A flat fee when handling John M. Olin Center for Law,
a divorce affords you with the Economics, and Business at Harvard
opportunity to control costs. Expect Law School, and 2002 graduate
to pay a fee of around $1,000 for of Harvard Law, conducted a
each contested issue faced (child study on marriages and prenuptial

4
custody, child support, division of agreements. Prior to the study,
property, etc.). Heather, in similarity to the majority
of Americans, had

four

Divorce
14

Divorce

very negative feelings in regards Prenuptial agreements also
to prenuptial agreements and may help identify irreconcilable
was actually against them. Upon differences prior to the couple
completion of her study, Heather being married. If a couple can’t
had an entirely different outlook on agree on important things prior to
prenuptial agreements: their marriage, maybe they should
reconsider. Furthermore, This may be
“prenuptial agreements are a
a possible solution to decrease the
state-enforceable way of ensuring
increasing divorce rate in America.
that couples talk about things, talk
through what kind of marriage These are just a few of the
they want and – it may be harsh possibilities of preventing a 50%
to say, but make there be legal decline in your net worth from
ramifications if you veer off that divorce. We leave the rest up to you!
course, to me, it’s premarital Call us today so we can assist you
counseling.” before you need the services of an
attorney or divorce mediator.

4four

Upheaval in the
stock market 15

Upheaval
in the Stock
Market
T he game of investing has changed. In recent years, we have witnessed
the roller coaster experience of investing. Dramatic highs and lows have
called for a new playbook.
Did you know that the greatest single decline in the value of the stock
market, as measured by the Dow Jones 30 Industrials Average (DJIA), was
October 19th, 1987? On that day, the market lost 22.6 percent, according
1
to the Wall Street Journal. Keeping your eye on long-term goals may help
overcome the feeling of panic that market volatility can inspire.

We’ve just witnessed the lost decade for investors:

Imagine if you were planning on the market nearly seven years to
retiring at the beginning of 2000. recover those losses! By late 2007,
Could you have retired? Where we were feeling pretty great as the
would you be today? Many wonder stock market soared to new heights
if the roller coaster will ever calm (O’Neil, 2007). But alas, we crash
down… again in 2008! The 18 month period
from October 2007 to March

5
The decade began with the dot
2009, saw the DJIA plummet over
com meltdown in the spring of 2000,
50%. Over $16.3 Trillion in household
where 80 million Americans lost 50%
wealth was
to 80% of their life savings. It took

five

Upheaval in the
stock market 16

Upheaval
in the Stock
Market lost in the 2008 recession, and we Do you know anyone still driving
are still $8.3 trillion down from the a 1952 Packard? Probably not.
peak (Bloomberg, 2012). When it debuted in 1952, the
Packard was a fantastic car. But
Many investment advisors
it pales in comparison to today’s
still utilize the Modern Portfolio
auto amenities and safety features.
Theory (MPT) of Investing when
Similarly, MPT relies on assumptions
managing their portfolio. This theory
that were created in a very different
was developed in 1952 by Harry
world than exists today and over
Markowitz and won him a Nobel
time, have proven inconsistent
Prize in economics. This theory is
with real-life investor and market
essentially an asset allocation theory
behavior. To put it simply, the old
on constructing optimal portfolios
rules of investing just don’t seem to
offering the maximum possible return
work anymore. Yet, many financial
for a given level of risk (investopedia,
advisors still adhere to the classic
2012). In practice, this theory leads
“buy-and-hold” strategy espoused
to buy and hold, where investors buy
by MPT. This theory claims that large
assets with the intent to hold them
swings in the DJIA should be few
for a long period of time (several
and far between. However, this is
years) in order to ride out the ups
far from the devastating realities in
and downs of the market. This leads
recent years.
to the biggest question, has the
financial world changed since the
1950s (The Brandes Institute)?

5 five

Upheaval in the
stock market 17

Upheaval
in the Stock
Market MPT states that the odds of the Dow Call us today to schedule a
falling 7.7% in one day are 1 in 50 complimentary Portfolio Stress Test.
billion. Let’s put that in perspective: We have identified seven economic
» That equates to once every 13.7 scenarios that we believe have
million years some chance of occurring over the
» Dinosaurs became extinct next few years. Based on these
roughly 65 million years ago scenarios, we “stress test” your
» Man arrived on the scene in portfolio to indentify where it may
his earliest form approximately 5 be vulnerable. Based on this analysis
million and our investment process, we
years ago then offer suggestions on how to
restructure your portfolio so it has
So, essentially, MPT predicts that an opportunity to profit regardless
the devastating Dow plunge of 7.7% of whether the market goes up or
in one day would happen once in a down. The world is changing fast
world’s existence – yes, only once in and this test can help highlight where
all of mankind! your portfolio may need to change.

It actually happened 4 times in Now that you’ve taken the time
2008 alone, for a grand total of to assess the 5 biggest dangers that
12 times in the last century (Short III, can cut your net worth in half, call us
2009)! today to schedule a comprehensive
review of your current strategies.
Unfortunately, there is no crystal We will evaluate your needs for
ball for investing. Of course, the short updating or creating the following:

5
answer is nobody knows what the
• Estate plan/will
market has in store for us. We see
• Proper insurance
it in every single financial product
• Buy-Sell agreement, Cross-Purchase
disclaimer: “Past performance is no
Buy-Sell Agreement, Key-Employee
guarantee of future results”. In these
insurance as applicable
challenging markets, fear has now
• Wealth Building Blueprint – 4 Step
paralyzed many investors. Yet making
Investment Process
the wrong decision (or not making
• Preservation strategies to protect
one at all) can cost more than just
your assets from disaster
investment losses, it can cost your
retirement.

five

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