presented by: david s. richmond, clu, chfc chairman & chief investment officer matthew j....
TRANSCRIPT
“GREEN SHOOTS”
Presented by:David S. Richmond, CLU, ChFC
Chairman & Chief Investment OfficerMatthew J. Curfman, CFP®
Senior Vice President of Investment Services
Presents…
Disclosures
David Richmond is a licensed Investment Advisor Representative in the states of MI, OH, AZ, CO, MN
Licensed to sell securities, annuities, & insurance Affiliated with Sammons Securities Co.®, LLC,
member FINRA/SIPC & Midland National Richmond Brothers Financial Management
Specialists, Inc. offers securities through Sammons Securities Co.®, LLC, member FINRA/SIPC
Fee-based investment advisory services offered through Sigma Planning Corporation, a registered investment advisor
Disclosures
Richmond Brothers offers securities through Sammons Securities Co.®, LLC, member FINRA/SIPC. The broker/dealer for Midland National’s variable products is Sammons Securities Co. Sammons Securities Co. is a registered broker/dealer under the Securities Exchange Act of 1934. Sammons Securities Co. is an indirect wholly owned subsidiary of Sammons Enterprises, Inc., of Dallas, Texas, the ultimate parent company of Midland National.
Disclosures
This is not intended to be a sales seminar. The purpose of this Webinar is to provide you with general information on current economic happenings and investment strategies
There will be an opportunity to schedule an appointment for an individual consultation at the end of this Webinar which may result in a recommendation of specific financial products that may help you achieve your financial goals
There is no obligation to schedule an appointment or purchase a product
Agenda
2nd Quarter 2009 Review
Review of Consumer Sentiment & Realities of Recovery
Analyzing the Recovery Potential of a Stock or Fund
Q & A Session
2nd Quarter Review:Markets
Sources: http://www.marketwatch.com/investing/index/COMPwww.googlefinance.com
Feb Mar April May June
-20%
0%
20%
40%
DOW
NASDAQS&P 500
2009 Index Comparison
Please note: You may not invest directly in an index.
As of 06/19/2009
2nd Quarter Review:Signs of Bottoming?
Seasonally Adjusted Unemployment Rate
Source: http://data.bls.gov/PDQ/servlet/SurveyOutputServlet
2009 7.6 8.1 8.5 8.9 9.4 JAN FEB MAR APR MAY
2nd Quarter Review:Monetary Policy
Sources: Federal Reserve Boardhttp://stockcharts.com/webcgi/Pnf.asp?S=$UST1Y&N=A&C=2
Month/Day 2008 2009
1-Jan 7.25% 3.25%
1-Feb 6.00% 3.25%
1-Mar 6.00% 3.25%
1-Apr 5.25% 3.25%
1-May 5.00% 3.25%
1-Jun 5.00% 3.25%
1-Jul 5.00%
1-Aug 5.00%
1-Sep 5.00%
1-Oct 5.00%
1-Nov 4.00%
1-Dec 4.00%
Prime Rate
June 2009
1 2 3 10 20 40
0
1
2
3
4
5
6
1.88
3.864.63
Yield Curve
YEAR
PER
CE
NT
As of 06/18/2009
2nd Quarter Review:US Dollar
Source: http://www.cnbc.com
US Dollar/Canadian Dollar 3 month chart
As of 6/19/09US Dollar has weakened this quarter
2nd Quarter Review:Emerging Markets
& Commodities
Sources: http://finance.yahoo.com/echarts?s=000001.SS#chart4:symbol=000001.ss;range=3m;compare=^bvsp+rts.rs;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined http://www.wtrg.com/daily/crudeoilprice.html
Jan. 2009 $36/barrel
June 09
Consumer Sentiment & Realities of Recovery
Consumer Sentiment & Realities of Recovery
Remember the days of getting a toaster with a new bank?
Source: http://mortgagenewsclips.com
57 bank failu
res since 2008
Source: http://investment-blog.net/the-list-of-total-2008-and-2009-bank-failures/
Consumer Sentiment & Realities of Recovery
Source: LIMRA Consumer Surveys
March 2008
October 2008
January 2009
Consumer Sentiment & Realities of Recovery
Consumer Predictions for a Return to Economic Stability
Source: LIMRA Consumer Surveys
How Do You Feel About Retirement?
STRESSED
OVERWHELMED
Confused
No time
ResponsibleSad
Money prices
Stuff you need
….and stuff you don’t
Comforting
Weight off your m
ind
Relief
Secure
Math
Consumer Sentiment & Realities of Recovery
Possible Goals for Retirement
Create a cash flow to help supplement income
Protect principal as much as possible while providing cash flow needed for retirement
Provide some growth to help offset inflation
Consumer Sentiment & Realities of Recovery
R I SK
Longevity
Source: CDC: Health, United States, 2006
At birth If you live until 65 If you live until 75
77.5
83.4
86.8
As people age, their life expectancy actually increases
People’s Assets Are Shrinking…
- Total losses collectively in 401(k)s and IRAs: $2.0 trillion
- $1.9 trillion lost in traditional defined benefit plans
- $3.6 trillion in non-pension accounts
Sources: Employee Benefit Research Institute calculations, 2008Fidelity Investments & 2009 Metlife Survey
As of 12/31/08
People’s AssetsAre Shrinking…
- The average 401(k) participant lost 27% of their account value (or $19,000)
Sources: Employee Benefit Research Institute calculations, 2008Fidelity Investments & 2009 Metlife Survey
As of 12/31/08
How Long Will It Take to Recoup the Losses?
1 2 3 4 5 6 727% Loss
YEAR
Source: Based on 2009 Fidelity Survey results that an avg. 401(k) plan lost 27% or $19,000
Year 7
Year 4
By January, many accountshad lost as much as 50% of
their value
YEAR50% Loss
2 4 6 8 10 12 14 16
Year 8Year 15
Analyzing the Recovery Potential of a Stock or Fund
1. What is the underlying investment (if it is a fund) or What is the underlying business (if it is a stock)?
2. What has been the long term trading pattern of the investment? Has something materially changed to alter or create a new
normal? i.e. What are the 3, 5, & 10 year trading ranges of the investment?
3. Is the investment recovering = or > on the good market days and = or < the markets on the bad days? In other words, when the markets react, am I going to get my
fair share?
Three Step Process:
This information should not be construed as a recommendation to purchase or sell any particular investment or class of investments. The
information provided in this example is for illustrative purposes only.
What is the underlying investment?
Summary The Fund seeks to provide high current income consistent
with capital preservation by investing primarily in a portfolio of preferred securities and debt securities, including convertible debt securities and convertible preferred securities.
Invests at least 80% of its net assets in preferred securities; up to 20% of its net assets in debt securities, including convertible debt securities and convertible preferred securities, and 100% of its total assets in securities that, at the time of investment, are investment-grade quality (BBB/Baa or better), which may include up to 10% in securities that are rated investment grade by at least one statistical rating organization and lower by another.
The Fund is also authorized to invest in interest rate swap transactions and futures contracts. The Fund’s investment advisor is Nuveen Asset Management.
Source: www.nuveen.com
JPS
This information should not be construed as a recommendation to purchase or sell any particular investment or class of
investments. The information provided in this example is for illustrative purposes only.
What is the underlying investment?
The fund owns primarily preferred stocks 70% of all preferred stocks are issued by
financial firms and that means this fund will have exposure to the big banks
When looking at the allocation of the fund as of X it shows that 25% of the fund is commercial banks and another 21% is insurance companies.
So what does that mean in plain English?
This information should not be construed as a recommendation to purchase or sell any particular investment or class of investments. The
information provided in this example is for illustrative purposes only.
What is the underlying investment?
As of 04/30/2009 To
tal m
ay n
ot a
dd u
p to
100
% d
ue to
rou
ndin
g.
Source: http://www.nuveen.com/CEF/FundDetail.aspx?fundcode=JPS&tab=HD
Th
is in
form
atio
n s
ho
uld
no
t b
e c
on
stru
ed
as
a
reco
mm
en
da
tion
to
pu
rch
ase
or
sell
an
y p
art
icu
lar
inve
stm
en
t o
r cl
ass
of
inve
stm
en
ts.
Th
e in
form
atio
n
pro
vid
ed
in t
his
exa
mp
le is
fo
r ill
ust
rativ
e p
urp
ose
s o
nly
.
What is the underlying investment?
As of 04/30/2009
Industry % Portfolio
Commercial Banks 25.38%
Insurance 21.99%
Real Estate Investment Trust 14.31%
Electric Utilities 8.30%
Media 6.77%
Good or Bad?Arguments: BAD
- Avoid banks due to government involvement
- Banks are risky (growth has been hurt in the economic crisis)
GOOD -Most major banks have been stress tested and are viable -Underlying preferred stocks should move closer to par value as bankruptcy threat diminishes
Source: http://www.nuveen.com/CEF/FundDetail.aspx?fundcode=JPS&tab=HD
This information should not be construed as a recommendation to purchase or sell any particular
investment or class of investments. The information provided in this example is for illustrative purposes only.
Long-term trading pattern of the investment?
Source: http://www.marketwatch.com/investing/fund/JPS
‘04 ‘05 ‘06 ‘07 ’08 ’09
$0
$5
$10
$15
$20JPS 5 year chart
This information should not be construed as a recommendation to purchase or sell any particular
investment or class of investments. The information provided in this example is for illustrative purposes only.
Long-term trading pattern of the investment?
Source: http://www.google.com/finance?q=NYSE:JPS
JPS since inception
0
’09’08‘07‘06‘05‘04‘03‘02
5
10
15
20
This information should not be construed as a recommendation to purchase or sell any particular
investment or class of investments. The information provided in this example is for illustrative purposes only.
When markets react,will I get my fair share?
Daily Comparisons:
June 17, 2009 JPS up 0.34%, S&P 500 down 0.14%
June 2, 2009 JPS down 1.35%, S&P 500 up 0.20%
Longer-Term Comparisons:
Mar 9 – June 19, 2009 S&P up 34.49%; JPS up 108.12%
Please note: You may not invest directly in an index.
Source: http://www.google.com/finance?q=NYSE%3AJPS
This information should not be construed as a recommendation to purchase or sell any particular
investment or class of investments. The information provided in this example is for illustrative purposes only.
Analyzing the Recovery Potential of a Stock or Fund
Do I like the industry or sector that it is in and why?
What is the long-term trading pattern and what will be the catalyst to move the holding back to that trading pattern?
Am I getting my fair share as the recovery unfolds?
Answering these questions will tell you whether or not a particular investment is something that you should hold.This information should not be construed as a
recommendation to purchase or sell any particular investment or class of investments. The information
provided in this example is for illustrative purposes only.
Analyzing the Recovery Potential of a Stock or Fund
Analyzing each holding in your portfolio should be done on a regular basis (preferably weekly) Decisions must be made on whether to hold, add
to, or sell
NEXT WEBINAR WILL COVER RULES OF INVESTING & MISLEADING PORTFOLIO MYTHS.
Th
is in
form
atio
n s
ho
uld
no
t b
e
con
stru
ed
as
a
reco
mm
en
da
tion
to
pu
rch
ase
o
r se
ll a
ny
pa
rtic
ula
r in
vest
me
nt
or
cla
ss o
f in
vest
me
nts
. T
he
info
rma
tion
p
rovi
de
d in
th
is e
xam
ple
is f
or
illu
stra
tive
pu
rpo
ses
on
ly.
Q & A Session
We welcome your questions at this time
REMINDER: Raise hand (click on yellow hand icon to raise/lower hand) to be un-muted and
ask question through phone or computer microphone Or, type in a question in the Questions pane and click send to submit it to
Richmond Brothers
