WEALTH MANAGEMENT & ACCUMULATION

WEALTH MANAGEMENT & ACCUMULATIONPresented by: H. Swint Friday, Ph.D., CFP.

1I. PRIORITY 1:UNDERSTANDING THE RISK

NASDAQ Composite Index History

NASDAQ Composite Index History

Japan Nikkei 225 Index

House-Price Indicators (1990-2010)

U.S. Housing Bubble

The Only Constant is Change!The Graham & Dodd P/E for the S&P 500

Measuring Risk Probability of Loss

Distributions Give Probabilities of Loss

The Type of Distribution Impacts Risk

Modern Portfolio Theory

DAX Index

Portfolio Diversification

Expected Return and Risk

Beware Misleading Data

1st Factor: Earnings Are King

P/E ratio measures price paid for $1 in earnings.Dow and DAX P/E Ratios

2nd Factor OIL: Life Blood of Global Economy

Every product has substantial energy component to its cost

Leverage effect:Sale price: $20 $20COGS: $15 $18 (20% increase)Profits: $5 $2 (60% decrease)

3RD Factor: Taxes

Warren Buffett Quote:

Simple Truth:Soccer BallArt PaintCreating Wealth MoneyWealth Redistribution

Every player on team gets chance to shoot for the goalMessi must wait his turn.Not fair that he gets all the glory.

4TH Factor: Housing

5TH Factor : Fed Policies

THE RICH ARE RICHER

The rich are getting richer. All is going to richest of the rich.52

Why Are Richest of Rich Getting So Rich?1.Their Investment Choices:

Business OwnershipReal EstateStocks and Bonds

2.They take risks other dont56THANK YOU !