Erika Safran, CFP. President Safran Wealth Advisors, LLC A Registered Investment Advisor

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1 2015 Erika Safran, CFP President Safran Wealth Advisors, LLC A Registered Investment Advisor

2 ?

3 Build financial confidence

4 $ $.?

5 Investing means taking risks.

6 Not investing means taking risks, too.

7 They Try to Predict the Future I have a proven system for picking winning stocks. The market is primed for a retreat. That sector will continue advancing through next year.

8 I can t take this bear market I m getting out! Everyone s making money I want a piece of the action.

9 I heard it on news. I d better sell now! I got a hot tip from my neighbor. It s a slam dunk. My friend works in the industry he s got the inside scoop.

10 The Death of Equities Business Week, 08/13/1979 The Crash of 98 Can the US Economy Hold Up? FORTUNE, 09/28/1998 Retire Rich A Simple Plan to Have it All FORTUNE, 08/16/1999

11 High rate of return Complete Safety Always liquid No income taxes No skill or knowledge required

12 What are your investment goals? are they short term or longer term goals? Are they in alignment with your life goals?

13 Market risk: Value of investment will fluctuate. Inflation Risk: Pension/annuity income remains fixed Interest rate risk: Rates increase, investment value drops Currency Risk: Dollar increases, value of your foreign investments decline Liquidity risk: ability to sell an asset without losing a part of principal Risk tolerance: Does your portfolio keep you up at night?

14 Define portfolio objectives. Risk tolerance. Mix of stocks and bonds and other asset classes. Domestic vs foreign allocation. Select investments. Integrate investments with your retirement, income, and tax planning.

15 Stocks Bonds Cash Real estate Commodities Alternate investments

16 . 37% Dev. Market $16 trillion 52% US Market $23 trillion Emerging Markets 10 % $4.3 Trillion

17 Stocks vs. bonds Large companies or small companies Growth/ value/ profitability Fixed income Shorter maturity or longer maturity Higher credit vs lower credit Taxable or municipal

18 Taxable fixed income Bank CDs - safety and insurance U.S. Treasuries - safety Corporate - high/medium quality High yield - lower quality ( junk bonds ) Foreign bonds - currency risk or credit risk Tax-exempt Municipal - federal, state, local - check the credit and municipality

19 Bond Prices Interest Rates

20 Higher risk and longer time frame 60 70% Domestic stock 30 40% Foreign stock 0 10% Bond or cash equivalents Moderate risk and long time frame 50 60% Domestic stock 15 30% Foreign stock 20 30% Bond or cash equivalents

21 Second Quarter 2015 Index Returns $80,000 $70,000 $60,000 $50,000 $40,000 Stock/Bond Mix 100% Stocks 75/25 50/50 25/75 $30, % Treasury $20,000 6/2015Bills $10,000 12/ / / / / /2013 Diversification does not eliminate the risk of market loss. Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect expenses associated with the management of an actual portfolio. Asset allocations and the hypothetical index portfolio returns are for illustrative purposes only and do not represent actual performance. Global Stocks represented by MSCI All Country World Index (gross div.) and Treasury Bills represented by US One-Month Treasury Bills. Globally diversified allocations rebalanced monthly, no withdrawals. Data MSCI 2015, all rights reserved. Treasury bills Stocks, Bonds, Bills, and Inflation Yearbook, Ibbotson Associates, Chicago (annually updated work by Roger G. Ibbotson and Rex A. Sinquefield). 21

22 6/30/2015Annualized Asset Class YTD 1 Year 3 Years** 5 Years** 10 Years** 100% Stocks / / / % Treasury Bills

23 Core or Supporting Role? Driver? Single investment or dollar cost averaging? Is tax efficiency important? Intraday Liquidity Diversification Fees and expenses

24 Mutual Funds ETF s Individual securities

25 Investment Company owned by Shareholders Invests to meet a stated objective Priced daily based on net asset value Can be passive or actively managed

26 . All funds have internal fees Some charge commissions

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28 Which index, sector, etc.? How many positions in ETF/mutual fund portfolio? Bond portfolio of 100 bonds is too concentrated. (Lehman Credit bond index has 3,300 bonds) If the yield is tempting, resist.

29 . Easy to trade Continued transparency what you see is what you get. Lower annual expenses Tax Friendly No need to sell holdings for shareholder redemptions, so most ETFs don t generate capital gains from buying and selling fund positions. You only pay tax on your profits when you sell.

30 . Easy to dollar cost average into mutual funds. Passive active or index

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32 Building an investment portfolio is like planting a flower garden. You create a portfolio mix where something will be in bloom all the time, but you do not expect everything to flower at once. Shelby M.C. Davis

33 Don t Drive Looking Backwards!

34 DIVERSIFY Allocate for your short and long term goals. Invest based on your risk profile Don t time the market and ignore the herd Dollar cost average Gage your risk tolerance Practice Global Diversification Avoid emotional pulls

35 Markets work. Capital markets do a good job of fairly pricing all available information and investor expectations about publicly traded securities. Diversification is key. Comprehensive, global asset allocation can neutralize the risks specific to individual securities. Risk and return are related. The compensation for taking on increased levels of risk is the potential to earn greater returns. Portfolio structure explains performance. The asset classes that comprise a portfolio and the risk levels of those asset classes are responsible for most of the variability of portfolio returns.

36 BOND S&P % 28.68% % 10.88% % 4.91% % 15.79% % 5.49% % % % 26.46% % 15.06% % 2.11% % 16.00% % 32% % 13% 2015?? %

37 The Cycle Can Be Difficult Point of Maximum Financial Risk - Investors Beware of Higher Investment Risk Wow, am I smart. Temporary set back - I m a long-term investor. How could I have been so wrong? Point of Maximum Financial Opportunity - Investors Realize Investment Opportunity

38 Uti Erika Safran, CFP is a wealth manager with Safran Wealth Advisors, LLC., a fee only wealth management firm which specializes in helping individuals, families, and small business owners reach their financial life goals. As a frequent lecturer and speaker, she has appeared on major networks including CNN, CNBC and CBS. She is an adjunct faculty member at Baruch College, where she teaches Fundamental of Financial Planning in the CFP program. She is a NY Chapter board member of the Financial Planning Association and member of the Financial Women s Association of NY. Safran Wealth Advisors, LLC 641 Lexington Ave., 14 th fl. New York, NY esafran@safranwealthadvisors.com