Perfect.Storm

The Perfect Storm The PFP Group Wealth Management Team November 2008

And the scariest Halloween costume for this year goes to...

Presentation Agenda ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

The Perfect Storm ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

The Perfect Storm ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

$ Mortgage CDO (Collateralized debt obligations) Originating/Sponsoring Bank Mortgage $ AIG $$$$$ %%%%% %+ % CDS %% CDS $ $$ %+ %- CDS %%% %+ AAA CCC % CDS Bank #1 Bank #3 Hedge Fund Collateral

The Perfect Storm ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Crude Oil Dow Jones Financial Index Hedge funds’ activities exaggerate volatility

The Perfect Storm ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Historical Perspective ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Historical interest rates, economy and stock market valuation relationship Calculated based upon earnings yield and S&P 500 levels each year. The raw data for this table was obtained from Bloomberg (and from S&P)

History a predictor of the future? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

S&P 500 Index (-17% over 10 years) MS Commodity Index (+270% over 10 years)

Investor Emotions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

The Cycle of Market Emotions Source: Westcore Funds/Denver Investment Advisers LLC, 1998 Point of maximum financial opportunity Optimism Excitement Thrill Euphoria Anxiety Denial Fear Desperation Panic Capitulation Despondency Depression Hope Relief Optimism Point of maximum financial risk “ Wow, I feel great about this investment.” “ Maybe the markets just aren’t for me.” “ Temporary setback. I’m a long-term investor.”

Patience will be rewarded Source: 10-years ended December 31, 2006. By staying invested you will not miss the best days

Volatility and Return ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

What’s Wrong with stockpiling cash? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Near term Strategy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Equity Sectors ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Fixed Income ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Fixed Income Example Note: Tax rate is for highest marginal tax bracket

The PFP Group - Who We Are ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Why The PFP Group ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

What’s our core value ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Why RBC ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

The PFP Group ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],www.thepfpgroup.com

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