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Mike created Clients First! to serve investment clients in
the manner they deserve: their interests come before
anything else.
What you get as a result: a
portfolio of investments tailored to meet your personal and
financial objectives. Based on your preferences, it will be
designed to limit downside risks without overly limiting
long-term performance.
What you would have: an effective three-part
investment strategy.
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Asset Allocation. After establishing a
relationship, a balanced portfolio with appropriate
asset allocation is created. This reduces volatility
and reductions in value due to a down market. But
performance will not necessarily diminish as volatility
does. It depends on your preferences. For example, a
client may have a high tolerance for risk and want to be
aggressive with all of his or her funds, i.e., investing
everything in stocks. But adding bonds, even as only 10
percent of the portfolio, would have a dramatically
positive effect on a portfolio's performance when
markets fall.
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Correlation of Assets. The second part is to
set up a good correlation of assets. This means
having assets in different types of investments.
Different investments move in different directions each
year. An obvious example is large cap stocks versus
mid-term treasuries. 2008 was a terrible year for large
cap stocks (big corporations). In contrast, treasuries
with about a 6 year term were the best performers in
2008 (according to the Wall Street Journal). But who
knew and who would have predicted it? So having the
right correlation of investments, given that picking the
winning category's nearly impossible, is critical. That
way the portfolio benefits regardless of which assets
outperform the market in a given year.
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Tactical Allocation of Assets. Third,
allocate investments well tactically. With the right
expertise and software, the first two parts aren't too
difficult. This part is the toughest. It means investing
more in different asset classes and sectors based on
which are most likely to perform best. So once the asset
allocation is suggested and the right correlation of
assets is recommended, the question becomes if there are
5 asset classes, for example, does each get 20 percent?
Often clients will already have stock index funds so
it's partly a question of figuring out how to work with
what's there so as not to have the client incur any
unnecessary costs from buying or selling or from the
related tax consequences. Will U.S. equities outperform
foreign stocks? After the tech bubble burst, the experts
Mike is learning about this approach from were pretty
sure (correct as it turned out) that small cap stocks
would perform better than the overall market as the
market improved. They had recommended that their clients
put more of their investment funds in small cap stocks
and less in other types of assets.
How you benefit: You would have an investment
approach you understand that is customized to meet your
needs. It would reduce your downside risk and increase the
likelihood that your investments will outperform the market.
Background. Mike's exciting new
direction is consistent with his success as an expert in
U.S. – Soviet relations, international trade negotiations,
and residential and investment real estate. Each avocation
has been characterized by a burning passion, by driving to
master what's most important, and by an intense desire to
serve others effectively. Initially he develops the
necessary expertise, then markets his services, earns
testimonials and positive performance statistics until a
steady stream of personal referrals results.
The formal training was a rigorous series of six, three-month CFP courses. After completing the fifth course, on investing, Mike discovered investing was his real passion as opposed to retirement planning and insurance. So Mike is now actively investing in equities. In 2010, his first year, he invested in and held stocks in the companies selected for an average of 6.5 months with a return of 15.5% (beating his benchmark, the S&P 500). In 2011 and 2012, he held stocks for 8.5 - 9.0 months on average. His 2011 and 2012 returns matched the S&P 500 (unchanged in 2011, up 13% in 2012).
In 2013, Mike continued to do well investing in equities but he also took the plunge with a start-up company, Cliffton Dry. Cliffton Dry produces a refreshing cider. It is an organic, low-alcohol, low-calorie and lightly carbonated drink. Unlike other ciders, Clifton Dry is made from the best apples available. It is a product which takes advantage of the healthy eating and drinking trends sweeping the industry, the farm-to-table movement, and the 20 - 40% annual increase in U.S. cider consumption (versus low or no growth in beer and other beverages) http://www.clifftondry.com/ . His investment results in 2013 were up 41.2% compared to the S&P 500, which was up 29.6% for the year.
Real world experience builds on the investment
experience he developed over the years. More importantly, valuable
lessons have come from a nearby company whose client-centered
approach is outlined above (asset allocation, correlation of assets,
tactical recommendations). The objective is to help clients meet
their goals without a transaction-driven business. Establishing the
fiduciary relationship, with appropriate disclosures, gathering
data, creating their financial plan, and then implementing and
monitoring it serves clients best.
Certified
Financial Planner Board of Standards, Inc. owns the
certification marks CFP®,
Certified Financial Planner, and federally registered
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