INVESTING IN YOUR FUTURE Financial Network Investment Corporation Member SIPC Edward I. Rosenblatt...
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Transcript of INVESTING IN YOUR FUTURE Financial Network Investment Corporation Member SIPC Edward I. Rosenblatt...
INVESTING INYOUR FUTURE
Financial Network Investment Corporation Member SIPC
Edward I. Rosenblatt 1920 Main St., Ste. 800 (888) 353-3642 Irvine, CA 92614
Edward Rosenblatt Ph.D., AAMS, CMFC
Investment Professional
Edward Rosenblatt, Ph.D., AAMS, CMFC
Investment Professional
Professional financial advisor since 1995
Accredited Asset Management Specialist
Certified Mutual Fund Counselor
Specializes in 401k/403b Savings Plan Rollovers
Former aerospace systems engineer
Ph.D. in astrophysics from UCLA
Focuses on aerospace employees and retirees
Long time speaker at Boeing & Aerospace Corp
Financial Network Investment Corporation Member SIPC
One of the largest independent brokerage
firms in the US with over 2000 advisors
Registered Investment Advisory Firm
Nationwide financial organization
Branch offices throughout the U.S.
Headquarters support staff . . . . 300+
Assets Under Management . . . . $40B+
Full Service brokerage firm
Visit our Website at www.financialnetwork.com
Financial NetworkOur Irvine Branch Office
Pershing Highlights
Pershing acts as a holding firm for Financial Network as a completely separate and independent company
Holds client investments and produces account statements
Pershing is a subsidiary of Bank of New York Mellon
Largest custodial firm in the U.S.; Founded in 1939
Responsible for 10% of daily transactions on NYSE;provides you with benefits of large volume trading
Visit their Website at www.pershing.com
Financial Workshop Four Key Topics
History of Stocks and Bonds
Portfolio Asset Allocation
Retirement Planning
Estate Planning
Performance of Various Types of Investments: 1925 - 2011
$100,000,000
$10,000
$100,000
$1,000,000
$10,000,000
$126,700,000
$30,100,000
$833,000
$207,000
$121,000
Historically, stocks have experienced higher grow potential than bonds in the long term, but bonds in general have had lower risk than stocks. It is not possible to invest directly in an unmanaged index. Past performance is not a guarantee of future results (source: Ibbottson Associates).
05 2010
Typical Investor BehaviorInvestors Tend to Buy and Sell at the Wrong Time
Euphoria/Buy High
Panic/Sell Low
Nervous
Concern
Confident
Relief
Nervous
Euphoria/Buy High
Concern
Confident
Bull/Bear Market Cycle
During a crisis, wealth transfers from the fearful
to the cool-headed investor
Dynamic AllocationAdjusting the Stock-to-Bond Ratio During a Bull/Bear Cycle
Hypothetical Stock Market Chart
Buy
Sell
Bear Bear BearBull Bull
40:60
50:50
60:40
70:30
60:40
50:50
40:60
30:7040:60
30:70
40:60
50:5060:40
70:30
60:40
50:50
40:60
30:70
40:60
Asset AllocationA Nobel Prize Winning Strategy
Divide a Window into Window Panes
GNMA U.S. Gov’t High Grade
Bonds Bonds Corp Bonds
Int’l Mid Cap Small Cap
Equity Equity Equity
Large Cap Large Cap Large Cap
Growth Blend Value
Asset allocation is driven by complex mathematical models that should not be confused with the
simpler concept of diversification. Asset allocation may help to lower risk, but does not eliminate
risk nor assure a favorable outcome.
Putting Risk Into PerspectiveFinding Your Personal Comfort Zone
Stable Value
An individual stock is in general riskier than the most aggressive mutual fund
Low Risk Medium Risk
Bond Fund
Small/Mid Value
High Risk
Balanced Fund
Large Cap Value Fund
Large Cap Growth
S&P 500
Large Cap Core
Int’l Index
Russell 2000
Small/Mid Growth
Large Co Int’l Fund
Sci & Tech Fund
Company Stock
GlobalBond
Boeing Savings PlanGeneral Investment Recommendations
Bond Index Fund 20% 30% 40% 50%
S&P 500 Index Fund 45% 40% 35% 30%
Small/Mid Co Fund 15% 10% 10% 10%
International Index 20% 20% 15% 10%
Stock-to-Bond Ratio 80:20 70:30 60:40 50:50
Boeing Stock can replace part of the S&P 500, but not more than a 10% allocation is recommended. The
S&P 500 Index is an unmanaged portfolio of the common stocks of 500 large-capitalization US
companies. It is not possible to invest directly in an index. VIP Stable Value can replace part or all of the
Bond Index for relatively short time periods, but is not recommended as a long term investment due to its
low yield. A 5% allocation in the Global Bond Fund would be acceptable (offsetting the allocation to the
Bond Index Fund by 5%), and a 5% allocation in the Diversified Real Asset Fund would also be
acceptable (offsetting the allocation to the S&P 500 Index Fund by 5%). Past performance is not a
guarantee of future results. The table above shows general investment recommendations that should not be
construed as individual investment advice.
Most Common IRA and 401k Mistakes
1. Investing based on emotions
2. Focused on short term results
3. Lack of diversification
4. Overly conservative or aggressive
5. Market timing
6. Not contributing enough
7. Specify Trust as benef to IRA/401k
Investment Mistakes Can Be Costly
The average stock fund return represents the average for all domestic stock funds from 1989 to 2009 as computed by Lipper Analytical Services. The average stock fund investor results were taken from a study by DALBAR. The study measures the effects of a large survey of investors who did not seek professional investment advice and includes their decisions to buy, sell, and switch into and out of mutual funds from 1989 to 2009. Transaction costs were included in the study, although taxes were not.
Average Stock Mutual Fund
Average Stock Fund Investor
$185,000
$485,000An 8.2%
average rate of return
A 3.1% average rate
of return
Growth of $100,000
Jan. 1989 to Dec. 2009
$300,000InvestorMistake
Gap
Sources of Retirement Income Are you on the right track for retirement?
Pension SocialSecurity
401k IRA
Misc.
Retirement Income
Retirement income must endure for your entire retired life and beat inflation
Will You Outlive Your Retirement Nestegg?
Example: Mr. and Mrs. Smith
Goal: retire at age 62 with a budget of $90,000 per year pre-tax, 3% annual increases for inflation, and do not deplete
retirement savings to age 90
Current Ages: 58 yrs
Retirement Ages: 62 yrs
Pre-Retirement Savings: $500,000 (at age 58)
Retirement Savings: $760,000 (at age 62)
Pre-Retirement Contributions: $30,000/yr combined
Pension: $40,000/yr combined
Social Security: $30,000/yr combinedHypothetical example. Actual results will vary based on individual needs. Past performance is not a guarantee of future results. Does not include charges, fees, or expenses associated with some investments. Does not include federal, state, or local taxes which, if applied, can affect investment value.
Will You Outlive Your Retirement Nestegg?
Results: Mr. and Mrs. Smith
Minimum Required RoR: 7.1% on average
Required Stock-to-Bond Ratio: 60-40
Portfolio Type: Moderate Growth & Income
If RoR is only 6% then savings depleted by 86
If RoR is only 5% then savings depleted by 83
If RoR is only 4% then savings depleted by 79
Hypothetical example. Actual results will vary based on individual needs. Past performance is not a guarantee of future results. Does not include charges, fees, or expenses associated with some investments. Does not include federal, state, or local taxes which, if applied, can affect investment value.
Will You be Ready for Retirement?The best time to check if you will be financially ready for retirement is:
One month before retiring
One year before retiring
Three years before retiring
Five years before retiring
Ten years before retiring
The Stretch IRAYour Heirs May Avoid Losing 50% to Income Taxes
Retirement Savings Plan
Rollover
IRA
IRA IRAIRA
Roll if >59 ½ or Change of Employer
No Taxes, No Penalties to Rollover
Contributions continue uninterrupted
Stretch IRA allows tax-deferred growth & lifetime income stream
This refers to employer sponsored retirement plans such as a 401(k) or 403(b)
Selecting a Financial AdvisorNot All Financial Advisors are Created Equal
Minimum 5 years experience
Strong financial credentials
Fee-based vs Commission-based
Full disclosure of all fees and charges upfront and in writing
Investments should be liquid to meet client’s needs
Should provide high quality on-going services
Should fully understand your financial needs and goals
Retirement Savings Plan Financial Services Program
Customized portfolio design
Retirement Planning one-on-one consultation
On-going investment advice on demand
On-going advice on dynamic allocation
Direct access to an experienced advisor
Flat $150 quarterly fee
Complete suite of financial services tohelp you meet your
financial goals
Preferred Asset Management Financial Services
Mutual Fund and Stock Research
RegularPortfolioReview
EstatePlanning
Active PortfolioManagement
PortfolioReallocation
Pershing charges nominal transaction fees on stocks, bonds, and mutual funds. Professional money management might not be suitable for all investors. Since no one investment program is suitable for all types of investors, this information is provided for informational purposes only. Your investment objectives, risk tolerance, and liquidity needs must be reviewed before suitable recommendations can be made. Please read Financial Network Investment Corporation’s ADV Part 2, which describes the advisory program, charges, fees and expenses.
Performance Reporting
Retirement Planning
On-goingConsultations
Preferred Asset Management Advisor minimum account $100,000 ($25,000 minimum for PAM program)
Low annual advisory fee covers all services*(1.75% for < $250k, 1.50% for $250k to $500k, 1.25% for $500k to $1M, 1.00% for >$1M)
Advisory fee can be tax deductible (consult your tax advisor)
No loads charged on any funds in PAM program* No commissions or up-front sales charges* No sales quotas or sales incentives
Over 6000 funds available from over 300 major fund families
Stocks and bonds can be included without commissions*
Incentive is to grow the account assets since advisory fee is based on account balance only; instills team approach
* Pershing charges nominal transaction fees on stocks, bonds, and mutual funds. Professional money management might not be suitable for all investors. Since no one investment program is suitable for all types of investors, this information is provided for informational purposes only. Your investment objectives, risk tolerance, and liquidity needs must be reviewed before suitable recommendations can be made. Please read Financial Network Investment Corporation’s ADV Part 2, which describes the advisory program, charges, fees and expenses.
Preferred Asset Management
You may transfer out of the PAM program at any time(an early terminate administration fee of $200 applies within the first 12 months)
Assets may be consolidated together from similar accounts
Account viewing 24 hr/day updated every business day
Personalized face-to-face consultations and on-going advice
You receive a monthly brokerage statement, monthly email update, detailed quarterly performance report, and quarterly newsletterInvestors should consider the investment objectives, risks and charges and expenses of a fund carefully before investing. The prospectus contains this and other information about the fund. Contact Edward Rosenblatt at 1920 Main St., Ste. 800, Irvine, CA 92614 (888) 353-3642 to obtain a prospectus which should be read carefully before investing or sending money.