Valley Wealth Economy Presentation - March 09

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  • Valley Wealth Economy Presentation - March 09

    1. 1. The Economy: This Time It Is Different A Lecture on Why and What to do Now Jeff Burrow, CFP ® Wealth Advisor Jason Gordo, CRPS ® Wealth Advisor Valley Wealth, Inc. is an SEC Registered Investment Advisor
    2. 2. How We Got Here Credit Markets / Lending Standards Financialization Subprime Lending / Subprime Crisis American Capitalism is Powered by Credit PLUS, Oil, War, Cyclical Downturn, American Lifestyle, etc.
    3. 3. Attempted Solutions So Far “ Injections” of Capital Worldwide FDIC Insurance Raised to $250,000 Federal Reserve Lowered Interest Rates Emergency Economic Stabilization Act of 2008 $700 Billion Troubled Asset Relief Program (TARP) The $800 Billion / $1 Trillion “Obama” Stimulus Plan
    4. 4. Big Budget Events WWW.CNBC.COM
    5. 5. Big Budget Events WWW.CNBC.COM $98 Billion
    6. 6. Big Budget Events WWW.CNBC.COM $237 Billion
    7. 7. Big Budget Events WWW.CNBC.COM $256 Billion
    8. 8. Big Budget Events WWW.CNBC.COM $500 Billion
    9. 9. Big Budget Events WWW.CNBC.COM $597 Billion
    10. 10. Big Budget Events WWW.CNBC.COM $698 Billion
    11. 11. Big Budget Events WWW.CNBC.COM $851 Billion
    12. 12. Big Budget Events WWW.CNBC.COM $3.6 Trillion
    13. 13. The Future <ul><li>Massive Amounts of Money from Government? </li></ul><ul><li>The Cost Financed & Next Generation Pays? </li></ul><ul><li>Will We Change Our Lifestyles? </li></ul>
    14. 14. Average is not normal WWW . BEHAVIORGAP . COM
    15. 15. LAST 80 THE YEARS THE STOCK MARKET WWW . BEHAVIORGAP . COM
    16. 16. AVERAGED 10 % WWW . BEHAVIORGAP . COM
    17. 17. WWW . BEHAVIORGAP . COM
    18. 18. Average is not normal WWW . BEHAVIORGAP . COM
    19. 19. those 80 during years WWW . BEHAVIORGAP . COM
    20. 20. ANNUAL LIKE RETURNS LOOKED THIS WWW . BEHAVIORGAP . COM
    21. 21. WWW . BEHAVIORGAP . COM 34 38 -13 -28 -43 -8 56 5 44 33 34 28 3 -7 -10 16 29 21 38 -6 4 2 20 30 20 14 1 50 25 8 -10 45 13 1 27 -10 21 16 14 -9 28 14 -10 1 16 17 -18 -28 38 27 -3 8 24 33 -3 21 23 5 32 17 2 18 29 -6 35 10 11 0 37 21 31 24 24 -11 -11 -21 32 12 6 15
    22. 22. WWW . BEHAVIORGAP . COM
    23. 23. HOW MANY OF THOSE RETURNS WWW . BEHAVIORGAP . COM
    24. 24. BETWEEN WERE WWW . BEHAVIORGAP . COM
    25. 25. 9 11 AND WWW . BEHAVIORGAP . COM %
    26. 26. OR EVEN CLOSE TO: average WWW . BEHAVIORGAP . COM
    27. 27. WWW . BEHAVIORGAP . COM 34 38 -13 -28 -43 -8 56 5 44 33 34 28 3 -7 -10 16 29 21 38 -6 4 2 20 30 20 14 1 50 25 8 -10 45 13 1 27 -10 21 16 14 -9 28 14 -10 1 16 17 -18 -28 38 27 -3 8 24 33 -3 21 23 5 32 17 2 18 29 -6 35 10 11 0 37 21 31 24 24 -11 -11 -21 32 12 6 15
    28. 28. WWW . BEHAVIORGAP . COM
    29. 29. 2 OUT OF 80 WWW . BEHAVIORGAP . COM
    30. 30. WWW . BEHAVIORGAP . COM Average is not normal
    31. 31. SO YOU MAY BE PLANNING ON WWW . BEHAVIORGAP . COM
    32. 32. WWW . BEHAVIORGAP . COM
    33. 33. WWW . BEHAVIORGAP . COM
    34. 34. REALITY YOU WILL IN EXPERIENCE WWW . BEHAVIORGAP . COM
    35. 35. WWW . BEHAVIORGAP . COM
    36. 36. Risks <ul><li>Losing Money in the Stock Market </li></ul><ul><li>Losing Money in a Bad Real Estate Deal </li></ul><ul><li>Not Able to Get a Loan / Re-Finance </li></ul><ul><li>Losing Your Job / Source of Income </li></ul>
    37. 37. The Biggest Risk <ul><li>Out-living your “nest egg.” </li></ul><ul><li>You want your money to out-live you. </li></ul><ul><li>You do not want to out-live your money. </li></ul>
    38. 38. Consistent Performance <ul><li>10% 11% </li></ul><ul><li>50% 100% </li></ul><ul><li>70% 233% </li></ul>Gains Needed To Get Even
    39. 39. Diversification <ul><li>Stocks in different industries </li></ul><ul><li>Mutual funds from different companies </li></ul><ul><li>Various style mutual funds from different companies </li></ul><ul><li>Stock Funds, Bond Funds, and Cash </li></ul><ul><li>Stock Funds, Bond Funds, Real Estate Funds & Cash </li></ul>
    40. 40. True Diversification <ul><li>1/3 Equities & Fixed Income </li></ul><ul><li>1/3 Real Assets </li></ul><ul><li>1/3 Alternative Assets </li></ul>
    41. 41. 1/3 Equities & Fixed Income US Stocks International Stocks Small Cap Stocks Municipal Bonds Corporate Bonds Mid-Cap Stocks
    42. 42. 1/3 Real Estate Multi-Family Housing Office Buildings Retail / Shopping Real Estate Related Securities Hospitality Warehouse / Industrial International Real Estate
    43. 43. 1/3 Alternative Assets Precious Metals Commodities Currencies Long / Short Equity Convertible Bonds Managed Futures Sector Rotation Opportunistic/Distressed Debt Natural Resources Special Situations Merger Arbitrage Treasury Inflation Protected Securities (TIPS)
    44. 44. Easy Plan Steps to a Better Life
    45. 45. E valuate What You Own and Why You Own It
    46. 46. A mount of Money You Need Monthly
    47. 47. S olve Your Risks and Shortfalls
    48. 48. Y our Spot on the Wealth Scale™ Bill Gates You
    49. 49. P osition Your Assets for True Diversification Liquidity Growth Income Inflation Protection Split Portfolio Into Three Parts
    50. 50. L eave the Jones’ Behind Financial Advice From Jones’
    51. 51. A nalyze Your Progress
    52. 52. N ever Forget the Fundamentals
    53. 53. There is an Easy Plan E valuate What You Own and Why You Own It A mount of Money You Need Monthly S olve Your Risks and Shortfalls Y our Spot on the Wealth Scale ™ P osition Your Assets for True Diversification L eave the Jones’ Behind A nalyze Your Progress N ever Forget the Fundamentals
    54. 54. Disclosures <ul><li>The content of this presentation is provided as general information only and should not be taken as investment advice. All information presented shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed in this presentation are solely the opinions of Valley Wealth, Inc. , Valley Wealth, Inc. is an SEC Registered Investment Advisor, and do not necessarily represent the opinions of sponsors of today’s lecture. Any action that you take as a result of information, analysis, or presentation during this lecture is ultimately your responsibility. Consult your investment adviser before making any investment decisions. </li></ul>
    55. 55. 1101 Sylvan Avenue. Suite B-6 Modesto, CA  95350 Phone Web (209) 579-5900 www.valleywealth.com Jeffrey S. Burrow, CFP ® Wealth Advisor [email_address] Jason M. Gordo, CRPS ® Wealth Advisor [email_address]

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