The Ray Group at Morgan Stanley Smith Barney

Transcription

1 The Ray Group at Morgan Stanley Smith Barney 2701 SW 34 th Street, #100 Ocala, Florida (352) / (800)

2 The Ray Group ALBERT W. RAY, III JANICE L. RAY Second Vice President Wealth Management Guided Portfolio Manager Senior Investment Management Specialist Financial Planning Specialist Financial Planning Specialist Financial Advisor Financial Advisor (352) (352) RENEE C. FLOYD Client Service Associate / Operations Specialist (352) renee.c.floyd@mssb.com Visit our website: September 28, 2010 Morgan Stanley Smith Barney 2

3 Introduction The Ray Group is a financial advisory team with Morgan Stanley Smith Barney in Ocala, Florida, focusing on wealth accumulation, growth and preservation, and estate planning. If you distill to its essence what we do in our practice, we help address the three cornerstone issues that all individuals and families have regarding their wealth: Will I make it? What is the greatest financial risk to me and to my family? Do I have any financial blind spots is their anything I have overlooked? We seek to accomplish this by employing a three step process: 1. We review your financial history, your current financial structure, your tolerance for and definition of risk, and your future goals. 2. After evaluating your financial posture, we present a written diagnosis and prognosis. 3. To the extent needed, we recommend a plan that seeks to ensure that what must happen to achieve your goals - does - for you and your family. September 28, 2010 Morgan Stanley Smith Barney 3

4 Family Wealth Management Potential Financial Blind Spots Financial Independence Family Planning Retirement Planning Estate Planning Liability Issues Lending Needs Financial Goals Statement of Goals Financial Plan College Planning Child /Grandchild 529 Plans Custodial Accounts Education IRAs Retirement Plans 401(k) Beneficiaries IRAs Wills Health Care POA Living Will Durable POA Goal Protection Life Insurance Review Corporate vs. Personal Structured Lending High Net Worth Personal Lending High Net Worth Business Lending Investment Management Investment Policy Manager Selection Child Living Expenses Special Needs Social Security Trusts Living Trust Credit Shelter Special Needs Generation Skipping Residence Trust Income Protection Disability Insurance Home Loans Mortgage Home Equity Flexible Equity Lending Asset Allocation Stocks Bonds Cash Risk Tolerance Parents Healthcare Living Expenses Housing Healthcare Heirs Beneficiary Planning Annual Gifting Estate Transfer Transfer on Death Asset Titling Liability Insurance Umbrella Coverage Asset Protection Securities-Based Lending Express CreditLine Control & Restricted Stock Lending (EFS) Letters of Credit Portfolio CreditLine Tax Planning Taxable vs. Tax Free Tax Reduction Plan Charitable Giving Charitable Trusts Bequests Donor Advised Fund Legacy Planning Long-Term Care Commercial Lending Business Banking Commercial Real Estate Equipment leasing Franchise Finance September 28, 2010 Morgan Stanley Smith Barney 4

5 Our Business Process & Values We show individuals ways to help them accumulate and preserve wealth during their lifetime, and by providing continuity for their families. We seek to accomplish this by employing a financial and estate planning process revolving around five functional areas: Income (Cash Flow) Savings & Investment Liquidity Taxation Estate Distribution We believe the financial fortunes of our clients should move in concert with ours. Our remuneration should be based on the quality of our advice which means it should go up and down in the same proportion as the value of the assets entrusted to us. We do not believe in a compensation system which is divorced from the results of our clients portfolios. Our clients can expect us to be knowledgeable about them and their financial needs. They can expect our recommendations to reflect their interests first. Finally, our clients can (and should) expect a relationship based on honesty, trust, good communication, candor and confidentiality. September 28, 2010 Morgan Stanley Smith Barney 5

6 Investment Philosophy The foundation of our long-held investment philosophy is the belief that success or failure in the market is primarily a function of investor behavior. While markets create temporary declines, it is people (not markets) that create losses. It therefore is our belief that the success of one s portfolio is a function of: the quality of investment choices an on-going process of due diligence investor behavior in good and bad markets. The great paradox of successful investing is that it is simple, yet ultimately very hard. The lessons that history tries desperately and repeatedly to teach us are simple to understand and they are incontrovertible. What makes investing hard however, is also what historically separates those who are successful from those who aren t discipline. We believe an investor's goals, tolerance for risk, and desire to maintain an investment strategy are necessarily more important than a performance objective. Aggressive performance goals often go unrealized as investors' true concerns about risk are uncovered by their deviation from (or abandonment of) their strategy due to short-term market volatility. We believe PERFORMANCE is the RESULT OF GOOD INVESTING HABITS... NOT the REASON to INVEST. September 28, 2010 Morgan Stanley Smith Barney 6

7 Our Value: We Help Investors Define and clarify needs and goals. Understand the difference between saving and investing. Identify and define risks. Choose appropriate portfolios. Provide on-going monitoring and due diligence. Maintain perspective and discipline. Manage investor behavior and avoid the great investor mistakes. Realize goals. September 28, 2010 Morgan Stanley Smith Barney 7

8 The Great Investor Mistakes (What we help you avoid.) Under-diversification Cost basis as decision criteria Over-diversification Leverage / margin Buying for yield instead of total return Speculating Euphoria Panic Media as source of advice Decisions based on past performance NICK MURRAY author September 28, 2010 Morgan Stanley Smith Barney 8

9 Investor Returns vs. Investment Returns 20 Years: % 8.20% Average Equity Fund Investor S&P 500 Past performance is no guarantee of future results DALBAR, Inc. An investment cannot be made directly into an index. Quantitative Analysis of Investor Returns 2010 September 28, 2010 Morgan Stanley Smith Barney 9

10 The Future The Strategy A Buffer Mr. & Mrs. Client Investor DUE DILIGENCE BUFFER The Ray Professional Consulting Group Portfolio & Risk Group Management Quarterly Review Process MARKET September 28, 2010 Morgan Stanley Smith Barney 10

11 Our Thoughts & Beliefs About Investing PRINCIPLE #1: Focus on the things you can control. We have no ability to affect economic or market events, but virtually limitless opportunity to make quality choices for our money, and to practice discipline and patience to control our investing behavior. PRINCIPLE #2: Your worst enemy is inflation. There is nothing "safe" about an investment that only maintains your principal. It's your buying power, not your principal that you must seek to protect PRINCIPLE #3: Grow your capital (principal) base; it's the key to growing future income. Once a dollar of principal is spent, you have lost forever its ability to generate income. PRINCIPLE #4: There is no such thing as "NO RISK". For every risk you avoid, you become exposed to another. Therefore, you must makes choices as to which risks you wish to manage. PRINCIPLE #5: Know the difference between permanent loss and temporary decline (or fluctuation). Market corrections will be your exam. September 28, 2010 Morgan Stanley Smith Barney 11

12 Thoughts & Beliefs cont d. PRINCIPLE #6: Be careful where you get your advice. The issue isn t whether what you hear or read is accurate, but whether is it appropriate for YOU. (Aspirin is a wonderful drug but it s not for everybody.) PRINCIPLE #7: Investment performance is not necessarily related to investor performance. The key determinant of wealth has not been the investment's performance or cost, but the investor's behavior. We believe the question isn t whether the train will get to the station... but whether you'll be on it when it gets there. PRINCIPLE #8: Historical "Rules of Thumb" (like price/earnings ratio) are only points of reference; they're not cut in stone. Let them guide your thinking, not control it. PRINCIPLE #9: "The first step to recovery is to stop doing the wrong thing. It's an old principle; you don't have to make it back the way you lost it." (Warren Buffett) Don't look backwards; you're not going in that direction. PRINCIPLE #10: The advance is permanent, the declines are temporary. (Nick Murray) This is the Core Belief of all successful investors and of our team. September 28, 2010 Morgan Stanley Smith Barney 12

13 Meet The Ray Group ALBERT W. RAY, III Second Vice President Wealth Management Senior Investment Management Specialist Financial Planning Specialist Financial Advisor (16 years experience) Member: Foundation for Economic Education Member: The Heritage Foundation Member: Univ. of Akron Alumni Association Member: Phi Delta Theta Alumni Association Prior to joining Morgan Stanley Smith Barney or its predecessor firm in 1994, I spent 12 years at International Business Machines Corporation in sales and corporate financial analysis, working with hundreds of our country's top corporations and senior managers. While at IBM, I was the recipient of two corporate internships studying finance with the faculty of the Harvard Business School. I graduated from the University of Akron (Ohio) in 1983 with a Bachelor of Science Degree in Finance following my studies in finance and mathematics. "I am a better investor because I am a businessman, and a better businessman because I am an investor." WARREN BUFFETT Additionally, I have served as an officer of the Ocala Youth Baseball Association. My community involvement has also extended to Toastmasters International and the Youth Motivation Task Force which provides business counseling to students from elementary grade levels through high school, and teaching public speaking for high school seniors. I enjoy coaching youth baseball and softball, playing amateur golf tournaments, reading and playing chess. My financial advisory team partner and wife of 24 years Janice Ray, our two children, and I reside in Ocala, Florida. September 28, 2010 Morgan Stanley Smith Barney 13

14 Meet The Ray Group, cont d. JANICE L. RAY Guided Portfolio Manager Financial Planning Associate Financial Advisor (10 years experience) Member: Foundation for Economic Education Member: The Heritage Foundation Member: National Association of Professional Women Member: Kent State University Alumni Association Member: Delta Gamma Alumni Association In 2000 I joined my husband Al s practice at Morgan Stanley Smith Barney and its predecessor firm following a career in retail sales. I graduated in 1984 from Kent State University (Ohio) with a Bachelor of Science Recreation degree. My current responsibilities include investment portfolio design, research and implementation. I also work with our clients in the formulation of Investment Policy Statements. My interests include almost all sports, coaching youth swimming and basketball, and reading. RENEE C. FLOYD Client Service Associate / Operations Specialist (24 years experience) After graduating with dual degrees in Accounting and Computer Systems Management from Drexel University in 1986, I began my career in the financial industry as a Trust Accountant for CoreStates Bank in Philadelphia. In 1988, I was promoted to Portfolio Manager for CoreStates Investment Advisers and became and Investment Officer in After relocating to Lakeland, FL in 1995, I began my career at Smith Barney as a Client Service Associate from and as an Operations Associate in Ocala, FL beginning in Married to husband, Stephen, for 25 years, we have 2 wonderful children, Nicholas and Laura. September 28, 2010 Morgan Stanley Smith Barney 14

15 Final Thought The way you achieve long-term financial goals, is with a long-term financial plan. The portfolio is certainly one very important element of that plan. But a portfolio is not, in and of itself, a plan. People with plans - make it financially. People chasing performance, as a substitute for planning, never make it. NICK MURRAY September 28, 2010 Morgan Stanley Smith Barney 15

16 Disclaimers The views expressed herein are those of the author and do not necessarily reflect the views of Morgan Stanley Smith Barney or its affiliates. All opinions are subject to change without notice. Neither the information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results. The Investments listed may not be suitable for all investors. Morgan Stanley Smith Barney LLC recommends that investors independently evaluate particular investments, and encourages investors to seek the advice of a financial advisor. The appropriateness of a particular investment will depend upon an investor s individual circumstances and objectives. S&P 500 Index is an unmanaged, market-value-weighted index of 500 stocks generally representative of the broad stock market. An investment cannot be made directly on a market average. Diversification does not ensure against loss. A Morgan Stanley Smith Barney (MSSB) relationship does not have to be established or maintained to obtain the products or pricing offered as part of the MSSB Home Loan Program at Citibank or Morgan Stanley Credit Corporation (MSCC). A default (stopping monthly payments on a mortgage could result in the loss of pledged real estate, securities or both. All home loans and home equity lines of credit are made by MSCC, Citibank, N.A., or CitiMortgage, Inc. equal housing lenders, and are subject to the respective lenders mortgage underwriting standards. CitiMortgage does business as Citicorp Mortgage in NM. Citibank, N.A., and CitiMortgage, Inc., are subsidiaries of Citigroup, Inc. MSCC is a subsidiary of Morgan Stanley. MSSB Is a subsidiary of both Citigroup, Inc. and Morgan Stanley. Our policy does not permit clients to use the proceeds of a home loan to invest in securities or other investment though MSSB or its affiliates. Neither you nor the respective lender pay any fee for the services of MSSB in connection with the MSSB Home Loan Program. If a loan closes with MSCC, Citibank, N.A., or CitiMortgage, Inc., MSSB may credit the Financial Advisor with a sales credit of up to seven tenths of one percent (0.7%) of the principal amount of the loan. The MSSB Home Loan Program only includes certain mortgage products offered by MSCC, Citibank, N.A., or CitiMortgage, Inc. There are frequently other lenders available with similar loan products. You are free to shop around to determine that you are receiving the best services and the best rate for these services. Arizona Mortgage Broker License No. MB ; Licensed by the Department of Corporations under the California Finance Lenders Law; Licensed by the New Hampshire Banking Department; Licensed by the New Jersey Department of Banking and insurance; Registered Broker-NYS Banking Department. Mortgage brokers may not make loans. Express CreditLine is offered through Citigroup Global Market Inc. Member SIPC. Borrowing against securities may not be suitable for everyone. If the value of the securities should decline below a minimum level, you may be subject to a collateral call without specific advance notice, requiring you to deposit additional cash or securities. If you cannot do so, all or a portion of your collateral could be liquidated, and a potentially taxable event could result. You are not entitled to choose which securities are sold or any extension of time to meet a collateral call. A concentrated portfolio holding a single or a few securities may be subject to greater risk of a collateral call than a diversified portfolio; a diversified portfolio will tend to be less subject to a sharp decline resulting from the negative performance of a single security. Availability, qualifications, and other restrictions may vary by state. Ask your Financial Advisor for details. Portfolio CreditLine is a registered service mark of Citigroup Global Markets Inc. Borrowing against securities may not be suitable for everyone. If the value of the securities should decline below a minimum level, you may be subject to a collateral call without specific advance notice, requiring you to deposit additional cash or securities. If you cannot do so, all or a portion of your collateral could be liquidated, and a potentially taxable event could result.. You are not entitled to choose which securities are sold or any extension of time to meet a collateral call. A concentrated portfolio holding a single or a few securities may be subject to greater risk of a collateral call than a diversified portfolio; a diversified portfolio will tend to be less subject to a sharp decline resulting from the negative performance of a single security. Availability, qualifications, and other restrictions may vary by state. Ask your Financial Advisor for details. September 28, 2010 Morgan Stanley Smith Barney 16

17 Disclaimers, cont d Flexible Equity Lending is offered through Citigroup Global Markets Inc., Member SIPC, and Citibank, N.A. and/or its affiliates. Borrowing against securities may not be suitable for everyone. If the value of the securities should decline below a minimum level, clients may be subject to a collateral call without specific advanced notice, requiring them to deposit additional cash or securities. If they cannot do so, all or a portion of their collateral could be liquidated, and a potentially taxable event could result. Clients are not entitled to choose which securities are sold or any extension of time to meet a collateral call. A concentrated portfolio holding a single or a few securities may be subject to greater risk of a collateral call than a diversified portfolio; a diversified portfolio will tend to be less subject to a sharp decline resulting from the negative performance of a single security. Our policy does not permit clients to use the proceeds of a home loan to invest in the securities or related markets. A payment default may result in the loss of the pledged real estate, securities or both. Availability, qualifications, and other restrictions may vary by state. Ask your Financial Advisor for details. For Flexible Equity Lending, at least 10% of the collateral must be from securities (and the account must remain pledged a minimum of one year). The funds cannot be used to purchase, sell or hold securities or repay debt incurred for those purposes. For loans less that or equal to $500,000 an early closure release fee to recover all third-party costs incurred in originating your line will apply if you close your account within 36 months. If your loan is greater than $500,000 you will be subject to all closing cost requirements and exempt from early closure fees. Property insurance and a fee to release and existing lien may be required. All commercial loans and lines are made by Citibank, N.A., equal opportunity lender. All credit products are subject to satisfaction of Citibank s underwriting guidelines and credit approval. Banking and credit products and services are provided by Citibank, N.A. (Member FDIC) and/or its banking or lending affiliates. Minimum balances and/or fees may apply to certain products see your banker for details. Tax laws are complex and subject to change. Morgan Stanley Smith Barney LLC, its affiliates and Morgan Stanley Smith Barney Financial Advisors do not provide tax or legal advice. This material was not intended or written to be used for the purpose of avoiding tax penalties that may be imposed on the taxpayer. Individuals are urged to consult their personal tax or legal advisors to understand the tax and related consequences of any actions or investments described herein. For clients whose account is carried by Morgan Stanley & Co. Incorporated, Morgan Stanley Smith Barney offers insurance products in conjunction with Morgan Stanley Insurance Services Inc. For clients whose account is carried by Citigroup Global Markets Inc., Morgan Stanley Smith Barney offers insurance products in conjunction with SBHU Life Agency, Inc. Since life insurance and long-term care insurance are medically underwritten, you should not cancel your current policy until your new policy is in force. Your actual premiums may vary from any initial quotation you receive. A change to your current policy may incur charges, fees and costs. A new policy may require a medical exam. Surrender charges may be imposed and the period of time for which the surrender charges apply may increase with a new policy. You should consult with your own tax advisors regarding your potential tax liability on surrenders Morgan Stanley Smith Barney LLC. Member SIPC. Consulting Group and Investment Advisory Services are divisions of Morgan Stanley Smith Barney LLC. September 28, 2010 Morgan Stanley Smith Barney 17