Four Components Of A Successful Income Portfolio

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1 Four Components Of A Successful Income Portfolio Presented by: David Fabian Michael Fabian FMD Capital Management One Park Plaza, Suite 600 Irvine, CA Ph: F: June 30, 2015 At FMD Capital Management we are focused on managing risks to grow your capital, getting results to secure your future. The information expressed by FMD Capital Management is for informational purposes only and should not be construed as a recommendation to buy, sell, or hold any specific security. Investing involves the risk of loss and further risk disclosure can be obtained by reading the ETF or mutual fund s prospectus. FMD Capital Management clients may own securities mentioned in this presentation. The illustrations and commentary in this presentation do not constitute individualized investment advice. 1

2 Market Update SYMBOL NAME YTD% MAJOR INDICES DIA Dow Jones Industrial Average SPY S&P IWM Russell QQQ NASDAQ BONDS LQD ishares Investment Grade Bonds HYG ishares High Yield Bond ETF 0.80 AGG ishares Total Bond Market MUB ishares Municipal Bonds EMB ishares Emerging Mkt Bonds 1.67 TLT ishares 20+ Yr Treasury Bonds SECTORS XLV Health Care Select Sector SPDR 9.12 XLY Consumer Discretionary Select Sector SPDR 6.19 XLK Technology Select Sector SPDR 0.89 XLB Materials Select Sector SPDR 0.13 XLP Consumer Staples Select Sector SPDR XLF Financial Select Sector SPDR XLI Industrial Select Sector SPDR XLE Energy Select Sector SPDR IYR ishares U.S. Real Estate ETF XLU Utilities Select Sector SPDR INTERNATIONAL EFA ishares MSCI EAFE 6.44 IEV ishares Europe 5.62 EEM ishares MSCI Emerging Markets 0.10 Key Takeaways S&P 500 Index is negative territory YTD, small caps leading Utilities lagging primarily due to rising interest rates. Health care strength biotech and health care stocks continue their momentum. International markets Europe and Asia still leading overseas. Mixed bag in EM markets. Bonds continuing to degrade this quarter. Saw massive flight to quality on Greece news. *Data as of 06/29/15, source: stockcharts.com 2

3 Chart Review Income Edition Key Takeaways VYM: choppy sideways action continues. Sell off prompted run down to 200-DMA. $TNX: Interest rates appear to have topped near 2.50% in the short-term. PIMIX & DBLTX: Examples of actively managed bond funds that have continued to outperform. 3

4 Four Components Of A Successful Income Portfolio Asset Allocation Stocks Bonds Alternative Cash Total 100% FMD Income Portfolio Highlights Strategic Objective: maintain an attractive yield with low volatility through all markets Risk Management: multi-asset approach to balance key risks with sell points established Asset Allocation: 55% bonds, 10% alternatives, 30% stocks, 5% cash 4

5 Income Customization Strategies High Yield Tax Efficiency Capital Preservation Key Areas To Avoid Over-reliance on one asset class to reach your goals. High fee mutual funds or annuities that drag on your returns. Esoteric asset allocation that doesn t align with the market or your risk tolerance. Worrying about every headline Greece, Fed, Inflation, GDP, etc 5

6 Income Portfolio Action Steps Ignore the media their job is to create hype and fear. Follow price action. Focus on what you can control strategic asset allocation changes and risk management. Manage expectations for total return 2015 may be a below average year in stocks and bonds. Pair quality and risk assets together to smooth out volatility and maintain market correlation. Download Ultimate ETF Income Guides in Special Report section of fmdcapital.com Portfolio Review Having a process is paramount to investment success. If you find yourself not getting all that you can from your investment portfolio, it may be time for a second opinion. Through a one-on-one portfolio review, we will point out the strengths and weaknesses in your existing holdings. This may include steadying your assets and cutting underperforming positions or preparing for the next buying opportunity using excess cash on hand. In addition, we can help you consolidate your financial accounts and identify new opportunities that you have previously overlooked. Simply call our offices today at or us at info@fmdcapital.com to take advantage of this unique opportunity for a professional second opinion. We can quickly schedule an appointment with one of our firms principals to meet your needs. FMD Capital Management One Park Plaza, Suite 600 Irvine, CA Ph: F: