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The Four D’s for Prudent Investing


The Problem1

The Process2

Carpe Diem3

THE PURPOSE FOR TODAY’S PRESENTATION


7Performance

Losses

1Fear of

The Future

2Forecast

and

Predict

3Track-

Record

Investing

4Information

Overload

6Breaking

the Rules

5Emotion-

Based

Decisions

NOT ENOUGH MONEY

NOPEACE

OF MIND

THE INVESTORS’ DILEMMA

Definition

Investors’ Dilemma:

A cycle explaining the

human side of

investing.


The Problem

The Investor’s Dilemma

The Symptoms

- Lack of returns

- High and/or hidden fees

- No understanding of risk

- Information overload

- Too much Time Required

- Too much complexity

- Who to trust?

- Lack of communication

The Problems

- Gambling with your money

- Mistaking a lot of “stuff” for

diversification

- Mistaking Activity for Control

- Believing that all risk is equal

- Trusting Your Broker

- Believing that this time its

different

- “I’ll stop when I get even” reflex


By The Numbers…

As the chart below clearly indicates – The Average Investor earns significantly less than the market indices, and investors that time the market actually lose money over the period measured.

•DALBAR, Inc., Quantitative Analysis of Investor Behavior, 2006

CATEGORY 1988-2007 Annualized Return

S&P 500 Index 11.81%

Average Equity Fund Investor 4.48%

Systematic Equity Fund Investor 5.83%

Market Timer Equity Fund Investor (-1.35%)

Inflation 3.04%


DIAGNOSE: What are the exact problems?2DECIDE: Are these problems important?3

DISCOVER: Is there a problem?1

DELEGATE: What do I do about it?4

The ProcessDISCOVER DIAGNOSE DECIDE DELEGATE


DISCOVER DIAGNOSE DECIDE DELEGATE

Tools

The Investor Inventory

The Investor Quotient (IQ)

Is Your Portfolio Broken?

Find Out!


The Investor Inventory.

45 minute Coaching Conversation

Discover if your portfolio has problems and/or

missed opportunities

The 20 Must Answer Question every investor

should have answers to…

The first step of the Prudent Process



Ask yourself these questions. If you answer any of them

as no, let it be an indication that there is a possible

problem (not catastrophic) that could pose an issue.

QUESTIONS ANSWERS


The Investor Quotient (IQ)


1. Are you invested in the market?

2. Have you ever made a conscious decision about how

you believe the market works?

3. Are you aware of the scientific studies and academic

evidence that discredits the trading activities of

brokers and retail mutual funds?

4. Are you sure your portfolio is truly diversified?

The Investor Quotient… continued



5. Do you consistently get above market rates of return?

6. Have you measured the total amount of commission &

trading costs you pay in your portfolio?

7. Have you defined your personal risk Tolerance?




8. Do you have a clear cut method for measuring the

success or failure of your portfolio?

9. Are you currently working with one financial

professional that you trust with your financial future?

10. When it comes to your investment portfolio, do you

know exactly what you are doing and why?




90-100: Amazing Investor Congratulations! You are among the most educated, diligent and confident

investors. You have experience in the investment markets and understand what it takes to be

successful. Now is the time to support your current knowledge with discipline and educational

reinforcement.

70-80: Better Investor As a Better Investor, you have been around the block a time or two and maybe had

some less than successful investing experiences. Now is the time to expand your knowledge about

investing and begin to make some solid choices about your financial future. To achieve this, seek

answers to the questions you missed.

50-60: Common Investor You are not alone. Like many investors, you may frequently find yourself

uncertain and confused about how to make the right investment choices. If you don’t already have an

Investor Coach that you trust completely, now is the time to build a relationship to last a lifetime.

30-40: Discouraged Investor It’s easy to feel discouraged when you have been doing what you thought were

the right things with your money without success. You may have followed all of the advice that

you’ve read in financial magazines and newspapers, yet you are not getting the exponential results you

had expected. Increase your IQ and find out why these methods have failed to work for you.

0-20: Frustrated Investor Flustered and confused, you may wonder where to begin – how is it even possible

to wade through all of the information that you are being bombarded with on a daily basis. Sort

through the chaos and find a path that is right for you. Begin by finding the answers to the IQ Quiz.

No matter where you fall on the IQ spectrum, there is good news here for you today. By following the

Prudent Investor Process you will be able to increase your IQ and gain hope for further growth!



Tools

1. Learn the Myths & Truths of Investing

2. The Free Market Investment Analysis

PROBLEM?

SOLUTION.



Myths

• Stock Picking

• Track Record Investing

• Market Timing

• Costs

Industry Perspective

Brokers

Commission driven FP

Insurance Agents

Truths

• Free Markets Work

• Modern Portfolio Theory

• Three Factor Model

Academic Perspective

Academics

Pension Plans & Endowments

Investor Coaches


Separating Myths From Truths


The Free Market Investment Analysis

Complete review of holdings

Measures Diversification

Uncovers Fees and Commissions

Best and Worst 1 & 5 Year Scenarios

Compares Current to Academic Structure

Identifies Overlap



Are These Problems Important Enough

to do Something About?

The ability to articulate what the problems are

will help you determine if you need to do anything

PROBLEM?

SOLUTION.



Discover If There Are Problems.

Diagnose the Problems.

Decide if The Problems Are Important.

Delegate…Take Action!

Delegate to a Prudent Expert:

Supported by third party research

Eliminate Gambling and Speculating

Easy to Implement

Easy to Monitor

DISCOVER DIAGNOSE DIAGNOSE DELEGATE


Carpe Diem!The First Step…

Schedule your 45 minute Discover Conversation

with a qualified Investor Coach.

Q: When is the best time to plant a tree?

A: 20 years ago!

Q: When is the 2nd best time to plant a tree?

A: Today…

What Would You Like Me to Do Next?


Thank You…

Presented by:

Jason Griffithwww.wealthandvitality.com

Hoffman & Associates, Inc.

121 N. Fir Street, Suite G.

Ventura, CA 93001

(805) 648-5300

www.investorcoach.info “InvestorCoach”

http://www.wealthandvitality.com/

http://www.investorcoach.info/

http://twitter.com/investorcoach

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