Plan Well. Invest Smart. Live Better 12 Amidon Avenue, Amesbury, MA 01913 | (978) 388-0020 Creating and Protecting Your Creating and Protecting Your Retirement Paycheck – Finding Income in Unexpected Places Using Alternative Investments to Preserve and Grow Wealth www.ClearViewWealthAdvisors.com Clear View Wealth Advisors, LLC Steve Stanganelli, MSF, CFP®, CRPC® Principal [email protected]
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Creating and Protecting Retirement Income_ Finding Income in Unexpected Places_2011_01_13
Planning for retirement takes more than simply saving or a buy and hold approach to investing. This presentation provides practical tips on how to plan for your income needs and turn your portfolio into a sustainable cash flow machine. By using diversified portfolios that include alternative income sources, you can help protect your investments from inflation. By having a plan for withdrawing money, you can help protect yourself from running out of it.
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Plan Well. Invest Smart. Live Better 12 Amidon Avenue, Amesbury, MA 01913 | (978) 388-0020
Creating and Protecting YourCreating and Protecting YourRetirement Paycheck – FindingIncome in Unexpected Places
Using Alternative Investments toPreserve and Grow Wealth
•Clear View Wealth Advisors, LLC is a Massachusetts-registeredinvestment advisory firm serving individuals, couples and businessenterprises with comprehensive planning and investment services.
•Established in 2010
Clear View Wealth Advisors: The Firm
•Located: Amesbury and Wilmington, Massachusetts
•Primary Goal: To protect client wealth through proactive andongoing planning combined with risk-controlled investing.
•Investment Strategy: Clients win by not losing. A multi-bucketapproach is used combining strategic and tactical asset allocation.The long-term bucket is focused on an absolute return strategythat includes the use of convertible bonds, MLPs and Alternatives.
1.) Americans1.) Americans are living longer,are living longer, healthierhealthier liveslives
2.) Today’s2.) Today’s retirees have the most healthy and activeretirees have the most healthy and activeretirement of any generationretirement of any generation
Through 6/30/10 *Source: BofA Merrill Lynch Convertible Research 6/30/10
Convertibles as an Asset Class
Get Paid While You Wait
Convertible bonds combine the stated repayment dates andyields of bonds and the upside potential of stocks.
Convertible bonds offer investors the potential to get paidwith interest during market corrections or bear markets whilethey wait for the next market recovery or bull stock market.
“If you stay out of stocks, you might miss the rally. If you buy stocks, you mightget creamed in another slump. But convertible(s)…let you have it both ways.
Making good selections from among convertible securities with so many variablesis challenging, but very rewarding. Finding the right convertibles is like a
Quote from Forbes Magazine
Notable Convertible Quotations
is challenging, but very rewarding. Finding the right convertibles is like agame where you can win or, alternatively, get your money back – withinterest.”
Source: Fidelity Investments. Hypothetical value of assets held in an untaxed balanced portfolio of50% stocks, 40% bonds, and 10% short-term investments and inflation-adjusted withdrawal ratesas specified. Average rates of return for stocks, bonds, short-term investments and inflation arebased on the risk premium approach. Actual rates of return may be more or less. The chart is forillustrative purposes only and is not indicative of any investment. Past performance is noguarantee of future results.
stions.
1. Lifestyle: Rule of Thumb of 4% to 5% of Portfolio
– Pros: Simple
– Cons: May not be sustainable especially in times of a bear market
2. Endowment Spending: Acting Like the Big Boys
Sustainable Withdrawals
Two Options: Lifestyle vs Endowment
2. Endowment Spending: Acting Like the Big Boys
- Pros: Allows for more controlled withdrawals with a built-in “smoothing rule” thatwill work well
- Cons: Takes more time to master; Requires “belt tightening” during bear markets
– This is a blended approach that combines prior year’s spending levels with currentportfolio performance
– Smoothing Rule: 90% is determined by prior year’s spending PLUS 10% from thecurrent portfolio value
– Ties a portion of spending to current portfolio value
– Works especially well at preserving portfolio during periods of inflation
• 1.) Learn More. Sign up for the ViewPoint Financial Planning Strategiese-newsletters.
• 2.) Check out www.moneylinkpro.wordpress.com andwww.ClearViewWealthAdvisors.com for more information and resourcelinks.
What You Should Do Next
links.
• 3.) Log onto the Free Money Road Map Program to complete your ownstarter financial plan at www.ClearViewWealthAdvisors.com orwww.BabyBoomerRetirementPro.com
• 4.) Call 978-388-0020 or 617-398-7494 for a complimentary MoneyTune Up, Portfolio Review or College Money Assessment
• Save $75 on the Focused Plan 2-Hour Brain Drain Strategy Session.
• 2-Hour focused strategy session to answer any questions on ANY financialquestion you have.
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What You Should Do Next
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• Phone and Email support throughout the year to help you with ANY financialplanning questions. Flat rate. No time billing. Call to redeem.
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Steve Stanganelli, MSF, CFP®, CRPC® (978) 388-0020 or (617) [email protected]
About Steve Stanganelli, CFP®, CRPC®
Steve Stanganelli is a five-star rated, board-certified financial planning professional who has over 20 years of experience coaching individualsand businesses on ways to improve and protect their personal or business bottom line.
Chief Personal Portfolio Strategist & Money Coach
Steve has worked with numerous individuals and businesses as a mortgage banker, business owner, business finance consultant and now as aCERTIFIED FINANCIAL PLANNER ™ Professional.
His practice encompasses retirement income planning, investment management, divorce settlement analysis and college funding strategies. Heis a published author and regularly presents on these topics to businesses, civic groups and community organizations.
Steve works with a variety of individuals and families with a special focus on Baby Boomer pre-retirees, business owners, corporate executivesand medical professionals.
Steve earned his Master of Science degree in Finance (MSF) from Bentley College with high distinction. He is also an honors graduate of theUniversity of Massachusetts – Lowell.
Steve holds the designations of CERTIFIED FINANCIAL PLANNER ™ and CHARTERED RETIREMENT PLANNING COUNSELOR ™ awarded aftercompletion of extensive, in-depth studying and exam requirements.
Steve is an executive officer of the Greater Merrimack Valley Estate Planning Council. Steve, formerly of Methuen, is a resident of Amesburywhere he lives with his wife, Kristin, a Registered Dietitian, and their infant son, Spencer. He is an avid competitive cyclist.
Clear View Wealth Advisors, LLC is a fee-only state-registered investment adviser.
The firm provides personalized financial planning advice on a broad range of topics with anemphasis on retirement income planning, self-directed IRA strategies, college funding andfinancial aid strategies, and divorce planning and settlement analysis.
Money management tools are available including customized investment programs forindividuals.
We offer a tool kit for money and help people make smarter money moves for life.
About Clear View Wealth Advisors & The Tool Kit for Money
We offer a tool kit for money and help people make smarter money moves for life.
Clear View: Who We Serve
We work with individuals or couples in need of trusted guidance while going through transitionslike a job change, retirement, divorce or other life-changing event.
We strive to make our services accessible to busy professionals and their growing families toassist with retirement planning, elder care or college funding issues.
Footnotes for WIA Convertible Bond Returns1. This presentation reflects only the convertible bond portion of WIA's client accounts. Returns are based on all convertiblebond positions held in accounts of all WIA clients during the periods reflected. Actual client accounts include positions otherthan convertible bond positions. Such other positions are not included in this performance presentation. Accordingly, theactual return of WIA client accounts is different, in some cases substantially, from the performance information presented forconvertible bonds. During the periods reflected, WIA did not manage any other accounts that included convertible bonds intheir portfolios.2. Returns include a 0.00% annual management fee. WIA's standard fee schedule is included in its Form ADV Part II.3. Past performance is not indicative of future results.4. No representation is made that the investor will obtain similar results to those shown above. The performance presentedmay not be representative of investments held in any one client account or performance realized in any one client account. Aninvestor's actual performance may differ from the performance presented above due to timing of investment, contributions and
Wellesley Investment Advisors - Footnotes
investor's actual performance may differ from the performance presented above due to timing of investment, contributions andwithdrawals. Performance does not reflect the effects of taxation, which result in lower returns to taxable investors.5. This report is meant for broad discussion purposes only, and is not intended as a recommendation to buy or sell any security.6. An investment in convertible bonds involves a risk of loss. The value of an investment in convertible bonds may decrease aswell as increase.7. WIA's convertible returns have been calculated using the methodology set forth below. Such methodology includes severalassumptions that result from systems limitations on aggregating the convertible bond portion of multiple client accounts.Although information has been obtained from and is based on sources WIA believes to be reliable, WIA does not guarantee theaccuracy of the information, and it may be incomplete or condensed. Returns do not reflect reinvestment of interest anddividend income.
8. Methodology for WIA Convertible Bond Returns:(a) Listed the market value of all convertible bonds held on the last day of each month.(b) Determined the weight of each bond holding in the portfolio (individual bond value / total bond value).(c) Determined each bond's return for the month (monthly interest earned plus / minus monthly price change).(d) Assumed that a bond entered the portfolio on the first day of the month in which it was first purchased.(e) When a bond is completely sold out of the portfolio, its prior month end value is adjusted to reflect the final sales price.(f) Weighted each bond's return for the month by the bond's weight in the portfolio.(g) Summed each bond's weighted return for the month to get the portfolio's return for the month.(h) Compounded monthly returns to calculate annual return.
Wellesley Investment Advisors
Other FootnotesOther Footnotes- A complete market cycle is defined either by a top-bottom-top or bottom-top-bottom pattern in the stock market. In the WIAanalysis, the S&P 500 was used to define the market cycle of the stock market.
- Bond & Average Credit Quality reflects the higher of the ratings of Standard & Poor’s Corporation, Moody’s InvestorsService, Inc., and Fitch. If a bond is not rated by any of these organizations, Wellesley Investment Advisors uses theirproprietary credit rating system to demonstrate the credit quality of convertible bonds. Ratings are relative, subjective and notabsolute standards of quality.
- Alpha statistics provided by Morningstar, Inc. as of June 30, 2010.
Appendix: A Fairly Balanced Universe of CB Issuers
Source: BofA Merrill Lynch Convertible Research 6/30/10
Expand investor base – flexibility, less restrictive covenants
Recent innovations provide tax and EPS advantages
Exchangeable structure allows for monetizing a stake in anothercompany
• Defers capital gains until maturity
Part of the classic financing chain
Appendix: Convertibles as an Asset Class
Why convertibles cannot be replaced with Equities, Bondsand Options:
a) Unlike Bonds and options, many convertible bond holders canobtain a certain amount of underlying shares in exchange for theconvertible bond structure at any time.
b) Unlike options, most convertible bonds have dividend and takeoverb) Unlike options, most convertible bonds have dividend and takeoverprotection.
c) Convertibles offer optionality for companies where there is no liquidoption market.
d) Convertible bond market tendency is to offer investors theopportunity to buy volatility exposure at a relatively cheap price
e) Convertible bonds offer issues “suboptimal” call features
Source: 2007 UBS Global Asset Management (Americas) Inc.