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Investment Advice and Planning: Strategy - Module 3.10 Managed Portfolios – Risks

Tue, 11 Apr 2023 10:43:33 GMT

Market Risk: is simply the fluctuation in the value/price of a given asset or asset class over time in its given market i.e. exchange-traded securities, currency, property, commodities, alternative investments, debt instruments, and services
Inflation Risk: covers a number of potentials affecting the price of goods and services, interest rate hikes or interest rate reductions, and purchasing power diminished by rising prices. Also other forms of inflation i.e. hyperinflation, deflation, and stagflation.
Timing Risk: is the attempt to buy/sell assets based on potential returns which may or may not be realized with such attempts considered to generally be speculation.
Diversification Risk: Diversification is a strategy that mixes a wide variety of investments within a portfolio in an attempt to reduce volatility. The variety of investments covers all asset classes including jurisdictions i.e. countries.
Liquidity Risk: is determined by the ability of a firm, company, or even an individual to quickly access their funds i.e. to pay debts or meet cash needs instantly.
Reinvestment Risk: Reinvestment risk is the chance that cash flows received from an investment will earn less when put to use in a new investment.
Credit Risk: Credit risk is the possibility of losing monies due to borrowers being unable to meet payment or return the principal that is used for investing.
Value Risk: better known as Value-At-Risk (VAR) and measures the possible loss that can be incurred over a period of time for a given asset/investment.
Currency Risk: the possibility of losing money due to unfavorable moves in exchange rates caused by central bank policy changes as well as geopolitical policy changes.
Investment Management Risk: is the process of recognizing, evaluating, and managing the uncertainty of investment decisions. There are a number of strategies that can be used to determine the risk and are statistical in nature.
Due Diligence Risk: a process to evaluate and manage risk for a business or investment decision. The process can involve financial statements, and business models, including company management, staff, and business competition.
Economic Risk: sovereign debt, trade, and political wars, tariffs and sanctions, environmental laws and regulations, energy and infrastructure development, or lack thereof.
Sovereign Risk: the potential for a nation's government to default on its sovereign debt by failing to meet its interest or principal payments. This also includes not maintaining the rule of law and the inability to protect foreign investment in the country.

It is important to understand that risk is intrinsic to any investment and that the degree of risk is commonly determined by historical outcomes and the perception of an investor. In this case, perception is defined by the risk tolerance of the investor.

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Investment Advice and Planning: Strategy - Module 3.9 Managed Portfolios – Rule of Thumb

Thu, 14 Jul 2022 09:12:02 GMT

50-30-20, 60-30-10 & 70-20-10 Rules – apportion monthly income by basic budgeting rules as follows:

ALLOCATION RULE

100 Rule – is in essence an asset allocation model in relation to equities that works by taking 100 and from that subtracting the age of the individual to provide the percentage of a portfolio that should be invested in stocks at that point in life.

PROPERTY RULE

1% Rule – is a basic measure of the rental return that a property should be earning by multiplying the purchase price plus maintenance costs of the property by 1%.

RETIREMENT RULE

3%, 4%, 5%, 8% Rule – The following percentages are very basic guidelines and are qualified by the following: living expenses, retirement age, life expectancy, rate of inflation, including portfolio composition and valuation. These percentages represent an Initial Withdrawal Rate (IWR) from a portfolio once in retirement. A 3% IWR off a portfolio would be considered rather conservative by some. Whereas a 4% to 5% IWR is more likely with the 8% IWR being more comfortable. It is assumed that the IWR is covered by distribution from the portfolio in terms of dividends and interest. Once a percentage has been selected it is easy enough to calculate what each percentage represents in terms of total portfolio value i.e. by dividing the initial annual expense (including a percentage emergency buffer in the initial annual amount) by the percentage drawdown of either 3%,4%,5% or 8% will give an initial portfolio valuation for the 1 ^st year. Future adjustments to the drawdown can be made based on the valuation of the portfolio and cost of living index at that time.

20x, 25x, 33x, Rule – provides an indication of what a retiree may need, based on the first year’s IWR, in terms of portfolio value. This is calculated by taking the first-year IWR of 4% and multiplying it by 25 or for those looking at early retirement 33. If there are better than expected returns on a portfolio a 5% IWR can be multiplied by 20. This multiple can be adjusted to reflect the IWR percentage that is applied by dividing 100 by the IWR rate i.e. take the first year, in retirement, annual income, and multiple by the outcome of the calculation of 100 divided by the IWR. It should be noted that these calculations are based on a 30-year retirement timeframe but need to be adjusted based on changing living expenses, retirement age, life expectancy, and rate of inflation, including portfolio composition and valuation.

STOCK MARKET TRADING RULE

3-Day Rule – This is a straightforward rule of when to buy a stock or market after there has been a major correction which usually is represented by a high single-digit movement down. In other words, wait 3 days before proceeding to buy a stock or market that has declined in value as this may represent a significant change in the operations of a company and in the case of a market important economic and/or political news.

The most important thing to remember is that all investments and situations are dynamic and changeable and that the previous rules outlined provide at best a simple indication of potential.

It should be noted that this article and all articles published by Creative Coach Online are for information purposes only and should not be taken as advice. It is essential to discuss the appropriateness of any Strategy with a licensed/registered professional. For more details, please visit https://www.creativecoachonline.com/disclaimer

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Edward Ketterer has asserted his rights to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988.

Investment Advice and Planning: Strategy - Module 3.8 Managed Portfolios – Global Capital Markets

Tue, 12 Jul 2022 16:53:57 GMT

Frontier Market

A Frontier Market is generally considered a subset of the Emerging Markets criteria and is best described as being in the very early stages of economic development where all the elements as described in GCM are in their raw or formative stage of development. The benefit of investing in a Frontier Capital Market is its potential returns as it broadens and expands its GCM criteria and presence. Currently, there are over 50 countries that are considered Frontier capital markets from parts of Eastern Europe, parts of the Middle East, Central Asia, and most of Africa.

Emerging Market

Emerging Markets are capital markets that are on the cusp of being recognized as a Developed Capital Markets providing more of the following elements i.e. market size, liquidity, rule of law and regulatory oversight, and openness to global financing and trading. Currently, there are over 40 countries that are considered Emerging capital markets, covering South America, parts of Eastern Europe, parts of the Middle East, parts of Africa, most of Asia and the Indian sub-continent, Russia, and China.

Developed Market

Developed markets are recognized as mature markets by their well-established market size, liquidity, rule of law, and regulatory oversight, including easy global financing and trading. There are 27 countries that are considered Developed capital markets i.e. parts of Europe and Scandinavia, Oceania, North America, and 2 Asian city-states.

Market Acronyms

In the last decade, there have been a few acronyms created to identify specific Emerging markets i.e. B.R.I.C.S. – Brazil, Russia, India, and China; P.I.I.G.S. – Portugal, Ireland, Italy, Greece, and Spain. A recent acronym for some Frontier Markets has been created - C.I.V.E.T.S. - Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa. It should be noted that there is some controversy over the use of these acronyms as a ploy to attract investors. It should be kept in mind that when considering investing in Frontier and Emerging markets to look at what is on offer, other than direct, as most are available through ETFs and mutual funds, providing a level of diversification, and most importantly the mandates under which they operate to provide a clear picture of the outcomes sought.

Investing in Global Capital Markets (GCM)

When considering diversification and potential returns the simple description of the type of GCMs as outlined above provides an indication of potential portfolio volatility, risk of loss, and a higher level of diversification, as compared to just investing in developed markets. This needs to be underpinned by considerations around investment time frames, that is to say, that those markets in a raw or formative stage would likely be invested for a long-time frame of up to 15 years plus. Whilst Emerging markets may be viewed as a 7-to-15-year time frame. With developed markets 5 to 10 years. Of course, returns can be considered relative to risk with Frontier, and then Emerging markets to provide the greatest potential return. Another consideration is the allocation of funds given to each of these capital markets and of course how it reflects the needs and risk profile of the investor.

It should be noted that this article and all articles published by Creative Coach Online are for information purposes only and should not be taken as advice. It is essential to discuss the appropriateness of any Strategy with a licensed / registered professional. For more details, please visit https://www.creativecoachonline.com/disclaimer

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Edward Ketterer has asserted his rights to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988.

Investment Advice and Planning: Strategy - Module 3.7 Managed Portfolios – ESG & CSR Strategies

Tue, 12 Jul 2022 15:46:26 GMT

The difference between strategies

A CSR Strategy – Corporate, Social, Responsible - in essence, represents the business model of a corporation i.e., the systems and processes in place to support the direction, supervision, and accountability of a corporation in being socially responsible.

Ethics & Integrity
As represented by management’s commitment to standards and practices of the highest levels.
Stewardship
To ensure the long-term sustainability of the corporation, its assets, and its reputation.
Accountability
For its actions or lack thereof with Transparency provided through reliable communication channels and
Effectiveness
Demonstrated by outcomes that represent its diligence and dedication to its CSR Strategy and effective implementation of its ESG Strategy.
Roles and Responsibility
Management is characterized and outlined with proactive responses that are anticipatory, with Participation by all interested parties in the corporation through active involvement in the corporation’s development and growth.

An ESG Strategy – Environmental, Social, Governance - represents how a corporation operates in a socially responsible way as actioned within the:

Environment
To ensure that not only its day-to-day operation but medium to long-term business model does not adversely affect the natural world or in a more proactive sense does contribute toward the sustainability and growth of the natural world.
Social
Is to be responsible for how a corporation treats complex social dynamics ranging from employees and product/resource sourcing to its consumer base with policies covering workplace health and safety to supply chain compliance that mirrors a corporation’s CSR Strategy and being sensitive and responsive to changing customer preferences.
Corporate Governance
Is supported by an active management providing and demonstrating functional leadership through its business model, and the business community as a whole.

Identifying

To find an exchange-listed company’s CSR Strategy you can start by looking at the company’s annual report, certainly its website as well as Corporate Register*, Sustainability Disclosure Database**, and CSRwire***.

How a company’s CSR strategy outcome is best measured is the effectiveness of its ESG Strategy and the results achieved and again to be found on the annual report and the company website. Managed investment products will highlight CSR and ESG in their investment mandates and outline the criteria used in the selection of exchange-listed companies.

As with all investment strategies, there is a trade-off and in the case of CSR and ESG strategies, these trade-offs are reflected by the limited number of exchange-listed companies available for investing and in the case of investment products the limitations placed by the investment mandate. On the other side is the ability to quantify how a company manages risk in its given industry, service, and/or product by engaging in such strategies.

It should be noted that this article and all articles published by Creative Coach Online are for information purposes only and should not be taken as advice. It is essential to discuss the appropriateness of any Strategy with a licensed / registered professional. For more details, please visit https://www.creativecoachonline.com/disclaimer

* Corporate Register: the global online directory of corporate responsibility (CR) reports past and present.

** Sustainability Disclosure Database: note that it has been decommissioned and replaced by GRI Standards Report Registration System to register information

*** CSRwire: is a source for sharing major news and updates on corporate social responsibility (CSR)

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Edward Ketterer has asserted his rights to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988.

Investment Advice and Planning: Strategy - Module 3.6 Managed Portfolios – Stock Picking Analytics

Mon, 11 Jul 2022 16:48:41 GMT

Technical Analysis considers the pricing trends of an exchange-listed company and based on the pattern of historical price movements look at anticipating its possible future price. Usually, this is considered along with the trading volume of the companies listed-security and its implicit velocity through price movement. Establishing the oscillation pattern of a listed-securities price by utilizing two fixed prices over its trading pattern history is commonly utilized to provide a possible trend. Moving averages in prices is also a tool in technical analysis as it looks at the pricing trend for a fixed period by calculating the total of the prices for that fixed period and dividing it by the period selected.

Ratios, Trend Lines, and Pattern Types are used in abundance when selecting an Exchange-Listed Company to invest in i.e.

Ratios = Fundamental Analysis

Price/Earning (P/E) ratio: values a company based on its share price to net earnings over 12 months. This ratio helps determine whether a company’s security is overvalued or undervalued and is commonly used when considering mature companies and industries.
Price/Sales (P/S) ratio: values a company based on its share price to sales over 12 months. This ratio works well with companies that have operating losses or are in a start-up phase of their development.
Profit Margin ratio: provides an indication of how much each dollar generated through sales represents profit after deducting related expenses into net income.
Dividend Payout ratio: is the percentage of net earnings which are paid out to shareholders. This ratio establishes the ability of a company to pay out a dividend from net income. Percentages can vary from 30% to 90% depending on the industry and the maturity of the company.
Price-free cash flow ratio: compares the total market cap of a company to its free cash and can signify whether a company is undervalued or overvalued as this ratio provides an indication of a company’s ability to grow business.
Debit-equity (D/E) ratio: shows how much debt a company is using to finance its growth and possibly its operations. The risk attached to debt is better accessed when looking at the variance between long-term and short-term debt.
Quick and current ratios: are liquidity ratios that gauge a company's ability to meet its short-term debt and operational expenses.
EBITDA-to-sales (earnings before interest, taxes, depreciation & amortization) ratio: is an earnings ratio that provides an indication of the company’s profitability through cash flow and operations.

Trend Lines & Pattern Types = Technical Analysis

Trend Lines: Candlestick chart of price movements in a stock over a measured period of time from which 2 prices are selected to create a channel of its movement between a top (also known as resistance) and bottom (also known as support) trend line. Breakouts below or above these lines indicate a potentially significant price movement of a stock and such movements can be notably affected by the volume of trades and the time measured as outlined by the top and bottom trend lines.
Pattern Types:

Triangle:

Ascending: breakout bullish market uptrend
Descending: breakout bearish market downtrend
Symmetrical: breakout can be either bullish or bearish

Pennant: two trend lines meet at a point and breakout to continue a trend
Flag: two trend lines forming a downward sloping rectangle with a breakout in the opposite direction
Wedge: two trend lines either downward sloping or upward sloping indicating a possible breakout in the opposite direction
Double Bottom / Top: are represented by a W and M letter configuration after 2 failed attempts to either break resistance or support and continuing with the previous trend by breaking through support or resistance.
Rounding Bottom / Top: is an upward or downward trend as it breaks through resistance or support levels
Head and Shoulders: where a price reaches 3 times the same support or resistance line indicating a potential for a breakthrough.
Cup and handle: a combination of a Rounding Bottom followed by a Flag or Pennant indicating a breakout.

Fundamental Analysis vs Technical Analysis - to compare these two forms of analysis to each other is perhaps inappropriate as they use different analytics regarding the potential performance of an exchange-listed company as measured over time i.e. fundamental analysis tends to look at the long-term potential performance whereas technical analysis looks at the short to immediate term potential performance. It is not unusual to use both types of analytics when selecting an exchange-listed company. More information on both can be found online including examples.

It should be noted that this article and all articles published by Creative Coach Online are for information purposes only and should not be taken as advice. It is essential to discuss the appropriateness of any Strategy with a licensed / registered professional. For more details, please visit https://www.creativecoachonline.com/disclaimer

Do more, be more, accomplish more. If you would like help on your journey then I'm here to help you get started.

Don't wait another moment. The time is now. The person is you.

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Edward Ketterer has asserted his rights to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988.

Investment Advice and Planning: Strategy - Module 3.5 Managed Portfolios – Alternatives

Mon, 20 Dec 2021 09:31:50 GMT

5. Infrastructure: Economic e.g., Transport, Telecommunication, Energy and Renewable Energy. Social e.g., Education, Healthcare, and Government

6. Hedge Funds: utilize short selling, leverage, and derivatives as tools to hedge against losses in core investments.

7. Exchange Funds: Provide large single stock holdings the ability to diversify with out directly selling the holdings.

8. Real Estate: Residential, Commercial, Industrial, Agricultural, Crowdfunding, Syndications, Loans

9. Distressed Debt and Securities: Investing in Companies or Governments that have either defaulted financially or are under financial distress.

10. Carbon Credits: is an exchange giving a monetary value to the cost of polluting the air and reflecting itself in the cost of doing business through an offset by investing in Bioremediation, Reforestation and Renewable Energy Construction.

11. Private Equity: Is the purchase and restructuring of companies not publicly listed on an exchange.

12. Venture Capital: Funds business startups, early-stage businesses, and emerging companies.

13. Financial Derivatives: Is a contract that is valued based on the underlying assets or index and provides exposure to hard-to-trade assets and markets

14. Structured Investment Products: Have the ability to customize exposure to different established markets by combining different investments thereby reducing investment volatility and increasing diversification.

15. Cryptocurrencies: is a digital online form of money built through blockchain technology.

16. Non-fungible Tokens (NFTs): NFTs represent a secure method of asset ownership, more easily transferable than traditional alternative assets as it is a unit of data stored on a digital ledger, called a blockchain, which can be sold and traded based on its licensed association to either a digital or physical asset.

17. Collectables: Wine, Whiskey, Stamps, Coins, Toys, Art, Furniture, Porcelains, Antiques, Clothing and accessories, Books, Comics, Sports Cards - to name a few.

Whilst I have listed 17 Alternative investments there are sub-categories in each which breaks them down further providing us with a sense of how broad this class of investing is.

The following are a list of characteristics that differentiate them from more traditional assets:

Low correlation to traditional investments like stocks, bonds, currency, and cash with higher return potential compared to such investments
More esoteric and oftentimes illiquid assets that over the longer term display less volatility compared to short term market sentiment.
Longer lock-up of periods, that can vary between Hard lock-ups where an investors funds are tied up and inaccessible for a time and Soft lock-ups: where withdrawals are allowed, with a fee payable.
Typically, higher minimum investment requirements including relatively high expenses regarding sales and purchases.
Unique risk profile that requires a detailed investment analysis before buying as it may be difficult to determine the assets current market value necessitating professional advice from a registered financial planner / licensed investment advisor.
Investment time frames for Alternative investment tend to be longer than traditional assets and tending towards investment time frames of 7, 10 and even 15 years periods.
Alternative investments are less regulated and prone to scams and frauds.
Alternative investments offer a level of diversification that can be viewed to provide an effective technique to minimize investment risk and volatility. Since alternative investments usually have low or zero correlation with traditional assets; it makes them a good option for portfolio diversification.

It should be noted that this article and all articles published by Creative Coach Online are for information purposes only and should not be taken as advice. It is essential to discuss the appropriateness of any Strategy with a licensed / registered professional. For more details, please visit https://www.creativecoachonline.com/disclaimer

Do more, be more, accomplish more. If you would like help on your journey then I'm here to help you get started.

Don't wait another moment. The time is now. The person is you.

Take the leap and get in touch or follow me https://www.creativecoachonline.com/ or email edward@creativecoachonline.com

Edward Ketterer has asserted his rights to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988.

Investment Advice and Planning: Strategy - Module 3.4 Managed Portfolios - Structures

Mon, 13 Dec 2021 13:20:17 GMT

Unit Trust: Is an un-incorporated investment vehicle that is established under a trust deed and investors rather than being shareholders are recognized as beneficiaries of the trust. The Trust pools monies from individual investors through the purchase of units in the Unit Trust which invests into a targeted selection of securities i.e., Equities, Bonds, and other investable assets with a view towards creating capital gains, income, or a combination of both. The Unit Trust targeted investment or investments are defined through the Trust Deed which provides details on how the investment is selected and the financial returns that such investments are aimed at potentially creating. A Unit Trust can be either open-ended or closed-ended and there are variations i.e. Business Trust and Unit Investment Trust.

Exchange Traded Funds (ETF): Where created in the 1990’s and provided investors with a low-cost way of investing into the equivalent of an Index or sector by offering a passive management style along with a degree of diversification. Later actively managed ETFs came into being from which a manager would deviate from what ever benchmark the ETF is emulating to outperform the set benchmark. When compared to Mutual Funds and Unit Trusts the most significant difference is the cost incurred by the investor. Having said that do not be surprised when ETFs become a part of the investment strategy of a Mutual Fund or Unit Trust.

Hedge Funds: Whilst considered a fund is generally characterized as an alternative investment and when compared to the structures in this article is aimed at institutional investors along with high-net-worth individuals and as such entry costs are much higher in money terms and necessitate the participation of an experienced investor along with the advice or guidance of an investment advisor preferred. It is noted here to provide context and differentiation or at the very least to avoid confusion with the other structures and will be covered in articles to follow.

Other Fund Structures: There are a number of variations on the above structures as follows:

Manager of Managers (MoM) Fund
Where an investment manager with a proven track record is selected and allocated a portion of a fund reflecting their experience to provide expertise in running that aspect of the fund.
Fund of Funds (FoF)
Is exactly as it sounds – in essence it is the selection of existing investment funds and is considered a multi-Manager approach to investing.
Umbrella Fund (UF)
Is a fund that differs from the others in “Other Fund Structures” due to its arrangement with the creation of a master fund covering sub-funds that operate as individual funds. A UF can also include insurance cover for individual investors under the master fund.

The advantage of these structures are the potential to reduce costs of entry for a smaller amount of monies invested into securities and investable assets that would otherwise be difficult to invest in. They can also provide diversification across equities, bonds, and other investable assets at what is considered a reasonable cost along with a higher level of liquidity and a professional investment manager to select and manage the underlying investments that provide the structures performance as compared to its outlined mandate. To provide these advantages there are fees known as an “Expense Ratio” and is based on a percentage value of the underlying investments and is more commonly known as the management fee. Other expenses are charged against the structure known as a load which is a payment for the placement of monies into the structure or as operational expenses not covered in the Expense Ratio.

It should be noted that this article and all articles published by Creative Coach Online are for information purposes only and should not be taken as advice. It is essential to discuss the appropriateness of any Strategy with a licensed / registered professional. For more details, please visit https://www.creativecoachonline.com/disclaimer

Do more, be more, accomplish more. If you would like help on your journey then I'm here to help you get started.

Don't wait another moment. The time is now. The person is you.

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Edward Ketterer has asserted his rights to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988.

Investment Advice and Planning: Strategy - Module 3.3 Managed Portfolios – Defined & Outlined

Mon, 13 Dec 2021 12:42:20 GMT

Active: Active Portfolio Management involves an investment manager who is regularly making judgements to buy, sell, or hold assets for the purpose of outperforming the assets given market. This is normally reflected by selecting a benchmark and in most cases, this is a recognized market index to which the asset(s) is / are attributed or compared to when considering performance. An active investment manager has a host of tools that will be used to make decisions to buy, sell or hold an asset. The tools used will cover research, analysis, and forecasts for a given asset or even a set of assets, based on their relationship to each other, topped off with the experience and expertise of the manager.

Passive: Passive Portfolio Management is simply a buy and hold strategy with the aim to minimize costs over the long term. The basis upon which this style of portfolio management is utilized is in keeping with the philosophy that the market continuously provides the best possible return as compared to active portfolio management. This is in keeping with the “Time in, Not Timing” as outlined in the article “Diversification and Investment Time Frame” that provides the best potential returns over the long term.

Discretionary : Discretionary Portfolio Management empowers an investment manager to make all decisions regarding the buying, holding, or selling of a portfolio’s assets. These decisions are based on the strategy as defined by the needs and wants of the investor.

Non-Discretionary: Non-Discretionary Portfolio Management maintains the investor as the final decision maker regarding the buying, holding, or selling of assets held in a portfolio. In most cases the investor will employ the advice of an investment manager as well as utilize the investment manager services to transact on behalf of the portfolio.

Portfolio Management Services (PMS): PMS basically utilizes one or a combination of the following i.e., Active Portfolio Management, Passive Portfolio Management, Discretionary Portfolio Management, Non-Discretionary Portfolio Management. The selection process as to what service or combination of services to incorporate would be based on the investors profile.

Individually Managed Accounts (IMAs): IMA Is a portfolio comprised of various investment assets constructed based on a comprehensive analysis of the investor’s needs. In some cases, there can be certain tax benefits depending on the tax jurisdiction of the individual and any assets transferred into the IMA. It is specifically designed and selects specific investments that reflect the investors specific requirements.

Separately Managed Account (SMA): SMA is a portfolio of investments that in some cases utilize model securities portfolios (MSP) where each MSP will be designed to achieve an outcome through a specific investment strategy set out by the investment manager of that MSP. In many cases the investor will need to open an account with each model securities portfolio invested in.

Unified Managed Accounts (UMAs): UMAs provide an investor with the ability to invest in a variety of investment types with multiple investment strategies and may even include SMAs as part of the account construction.

WRAP Account: Is an account that consolidates all fees and charges incurred for the i.e. management, administration, brokerage, and investment advice. The account reporting provides detailed summaries of investments and their performance as needed or required by an investor. The WRAP account can hold a variety of investments and utilize various investment strategies.

It should be noted that the range of Account types and Portfolio Management styles and their use is based in part on the amount of monies invested and the diversity of investment selected, including the variety of investment strategies required by an investor.

It should be noted that this article and all articles published by Creative Coach Online are for information purposes only and should not be taken as advice. It is essential to discuss the appropriateness of any Strategy with a licensed / registered professional. For more details, please visit https://www.creativecoachonline.com/disclaimer

Do more, be more, accomplish more. If you would like help on your journey then I'm here to help you get started.

Don't wait another moment. The time is now. The person is you.

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Edward Ketterer has asserted his rights to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988.

Investment Advice and Planning: Strategy - Module 3.2 Retirement Funding

Mon, 13 Dec 2021 12:26:25 GMT

Selecting the type of assets to invest into will be determined by managing expectations by establishing risk tolerance and investment objective and investment timeframe to be meet as covered in precious articles, along with periodic reviews of the placement of funds to ensure they are performing to meet the investment objective and that they reflect the risk tolerance set out. Module 2 will provide an indication as to what to consider through this process. For most people their work situation will provide an authorized structure which will provide a selection of investment assets – though the selection can be limited - that will allow them to place funds where both personal and work contributions can be placed.

Once retirement age has been reached there will be another set of structures that will need to be considered i.e. government payments and income distribution structures. Again, these structures and their availability will reflect jurisdictional and legislative issues including any local and global tax implications that are usually attached to such structures and payments to ensure that distributions take place on a complying tax efficient basis.

You will note that I have not described or provided any information on specific structures as there are many different types of structures depending on the jurisdiction i.e., in the United States there are 6 types of retirement plans readily available plus Social Security payments. In the United Kingdom there are 3 types of structures available and known as pension schemes and 1 of the 3 covers government payments. Depending on the tax jurisdiction you live under and the jurisdiction the distribution of funds originates from can reflect how the investing framework and assets including distribution structure will be selected.

Such details are best discussed with a licensed regulated professional in whatever jurisdictions are implicated i.e. declared tax domicile of those receiving payments, where distributions are originating from and where the underlying investments and assets exist. Including how the structures utilized are accessed by each jurisdiction. In this case the devil is in the details and proper professional advise is needed well before structures selected, investing and distributions take place.

It should be noted that this article and all articles published by Creative Coach Online are for information purposes only and should not be taken as advice. It is essential to discuss the appropriateness of any Strategy with a licensed / registered professional. For more details, please visit https://www.creativecoachonline.com/disclaimer

Do more, be more, accomplish more. If you would like help on your journey then I'm here to help you get started.

Don't wait another moment. The time is now. The person is you.

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Edward Ketterer has asserted his rights to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988.

Investment Advice and Planning: Strategy - Module 3.1 Wealth Creation

Thu, 26 Aug 2021 07:48:24 GMT

Another way in which wealth creation can take place is through lump sum investing which in essence is investing all investable funds at one time. This provides immediate exposure to investment markets and assets provided market timing is not a consideration – a consideration few, if any investors, succeed at. The pros and cons of lump sum investing are simply this. With a lump sum you are investing all at once and can select your investments across a range of assets. The con is that the market could fall after the lump sum investment takes place. The caveat to lump sum investing and truly for any investing is simple and stated in an earlier article i.e. “Time In, Not Timing” that provides the best potential return.

The third way is through leveraged investing this can be done a number of different ways and is basically the use of borrowed money to increase potential returns. The borrowed monies provide a potential multiple return on the investment component that is not borrowed but at the same time the interest on the borrowed funds and the risk of a declining investment market increase the costs of investing and the risk. As can be appreciated leverage investing is a double edge sword for the following reasons. On the up side or pro to leveraged investing makes more investable monies available since only a fraction of these monies are being used and the rest represents borrowed funds this makes taking larger positions in an investment possible. This provides an advantage of investing over a range of different investment assets with a smaller initial sum and the larger borrowed amount the remainder - profits are multiplied – often many times over. The down side or con to leveraged investing is the ownership of the underlying investment is given up and if the market moves against the investment there will be a requirement to make up the difference by providing more / increasing the amount of the initial monies used to create the leveraged investment position. An important note is that potential losses are multiplied many times which makes this wealth creation strategy not suitable for long term investing.

It should be noted that this article and all articles published by Creative Coach Online are for information purposes only and should not be taken as advice. It is essential to discuss the appropriateness of any Strategy with a licensed / registered professional. For more details, please visit https://www.creativecoachonline.com/disclaimer

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Investment Advice and Planning: Strategy - Module 3.0 An Introduction

Wed, 18 Aug 2021 20:22:38 GMT

As an opening and to keep it simple I will be covering how, managed portfolios whether actively or passively managed as, a mutual fund, a unit trust or an ETF (Exchange Traded Fund) structure can potentially fit into a client’s investment strategy looking at how each managed portfolio has a specific process in selecting underlying investments based on its interpretation of how best to select these investments to achieve the portfolios outcome. From there we consider how each would belong and integrate with each other utilizing a “Core + Satellite” approach which acts as a lattice for the investment products and services identified for a specific client’s needs and wants. As the lattice is extended products and services covering alternative investments i.e. structured products or pre-packaged investments, private equity, private debt, hedge funds, real estate, commodities, and collectables will also be discussed in articles to follow under “Investment Advice and Planning: Strategy - Module 3”.

Whilst it would seem that I have placed my attention on managed portfolios and alternative investments I will also add direct investing into individual listed securities and outline the various Rules(s) that have been and could be utilized when investing directly.

In amongst all this we will look at ESG Strategies and how Environmental, Social, and Governance issues are integrated as part of an investment strategy. As well as CSR Strategies which look at how Corporate, Social, Responsibility reflects itself in an investment strategy. These two strategies have become increasingly important in the minds and portfolios of the investing public and a comparison of each and how they potentially complement each other will be outlined as well as how they go about achieving the outcome desired.

Now we come to how we work exposure on a global, regional, and country level and how investing in Frontier, Emerging and Developed markets fits into the construction of an investment portfolio utilizing the “Core + Satellite” approach. Last but certainly not least is foreign exchange investing and currency exposure including crypto currencies and the importance of its use / presence in a portfolio.

The articles to follow will provide an over view of the subject areas outlined previously with a focus on the end result of where they would belong in a portfolio utilizing a “Core + Satellite” approach as a Strategy.

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Investment Advice and Planning: Structure - Module 2.3 Growth

Mon, 17 May 2021 10:33:01 GMT

In keeping with this we then identify how cash will be held and income generated from the investments selected if that is the outcome the investor wants to have. If income generation is not one of the requirements, then the selected investments could reflect longer investment timeframes and hold larger sums of monies as the need to anticipate income requirements is moved further into the future. It should be noted that during this process we will be identifying any other financial needs that are anticipated during the course of the life of the investor and placed strategically among the investments selected to reflect this need and in anticipation of being drawn out of the investments at a specified time. Cash held may change in terms of amounts and how it is held and its purpose as discussed in “Module 2.1” topic “Cash”.

We will also consider how to protect growth during the investment timeframes of an investor’s life and the significance and role that insurance plays in this process. For this I would refer back to “Module 1.4” topic “Insurance” as a reference to what is available that could assist should the growth process be interrupted and still build on the monies to be disbursed in the future as well as meet the development of any legacies set out to be founded.

In “Module 3” we will look at strategies that review the 3 foundations - Cash, Income and Growth and will outline types of investments that can hold Cash, be a source for Income and offer Growth potential. Strategies into how the 3 foundations play their role in a financial plan become clear when covered in relation to investment timeframes and diversification both topics discussed in “Module 1.2” covering “Investor Experience and Goals”.

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Investment Advice and Planning: Structure - Module 2.2 Income

Mon, 17 May 2021 10:28:46 GMT

In order to determine how much is required to meet average daily living expenses there are a number of ways to establish the amount needed.

If a portion of income is needed to meet the rental expense of a home or apartment a general rule of thumb is to take the monthly or yearly rental cost and use a multiple of 3 or 4 times that to determine the net income requirements for overall living expenses and the reverse is true for establishing how much rental expense can be absorbed out of a given income stream i.e., a third or a quarter of the net income received can be considered a reasonable guide.
Another approach is to take the average of the total living expenses over the last 3 years as a guide for what income is needed in following years - especially into retirement.
Whilst the preceding can determine what income is needed to live it becomes important to establish what is needed and wanted when heading into retirement and how to build the retirement nest egg. It can be stated that it is never too early to start to save for retirement and there are a number of guidelines used to determine how much should be put aside based on the age at which saving begins.
Some advice is to expect to spend between 70% to 80% of the last salary received to meet retirement spending needs.
Another is to expect to need double digit multiples of your pre-retirement salary to serve as a base from which you can receive a retirement income.

There are a number of different calculators available that will consider what you can expect based on the amount you put away. Factors considered are assumed and provide only an indication of what is needed and certainly only potentials i.e.

Assumed percentage of monthly salary saved
Assume a 2% increase in salary per annum
Assume a rate of inflation which can be based on the average inflation rate of the last 3, 5 and 10 years.
Assume a rate of return on funds saved based on the investment profile of the individual and then matched against historical returns of established portfolios used to accumulate superannuation savings – this could provide an indication of potential returns – but only an indication and not a guarantee.

It should be understood that there are a lot assumptions involved in determining how much to save to generate a retirement income and there are no guarantees that it will last or that you won’t out live what you have saved.

What this highlights is the need for on-going reviews and advice from a qualified financial advisor in the jurisdiction in which one lives as this will provide a base from which to consider tax implications, cost of living, and access to government pensions, if available, and the type of superannuation plans suitable to one’s personal circumstances.

We will also consider how to protect income sources during the saving stages of an investor’s life and the significance and role that insurance could play in this process and for this I would refer back to Module 1.4 “Insurance” as a reference to what is available that could replace sources of income or even become part of the income funding source besides or on top of growth investments.

In Module 2.3 “Growth” and Module 3 “Strategy” we look at ways in which income can be generated through the selection of growth investments and how it can be put aside for future requirements which ultimately lead to retirement and any desired legacies to be founded.

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Investment Advice and Planning: Module 2.1 Structure – Cash

Wed, 31 Mar 2021 14:34:36 GMT

Whilst cash can be utilized to make purchases of goods, services and assets - there are cases, and dependent on the age of the Individual, where some would consider a credit card or an overdraft line of credit as a suitable means of addressing cash needs for emergencies though generally this would not be a recommended course of action due to the cost incurred should full repayment not be done within the designated period as set out by the credit card issuer or where income or funds to pay off the credit card or line of credit are not available.

An important element to holding cash is how it is held to ensure quick and unobstructed access. One historical place, and certainly not necessarily recommended, is inside the proverbial mattress or for some in a lock box / safe at home. Though in this day and age a bank account or money market account with access through an Automatic Teller Machine (ATM) would be deemed more suitable or through an app set up on your mobile phone. Places or structures where cash can be held can also be dependent on when it may be needed or utilized which would be determined by personal preferences.

There are a number of strategies that can be utilized to maximize potential returns on cash without necessarily obstructing access or significantly reducing liquidity. It's best to keep in mind that before investing cash that appropriate advice is sought to identify how cash should be held and its appropriateness to the financial plan being put in place. In Module 3 “Strategy” this will be covered in more detail as we discuss the various strategies that can be applied to a financial plan and investing in general.

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Investment Advice and Planning: Current Situation & Profile - Module 1.4 Personal Insurance

Wed, 03 Mar 2021 10:53:29 GMT

Insurance cover becomes important as lost or damaged assets or an insurable event only needs to happen once and by having an appropriate policy in place a monetary safety net is there to cover losses, damages and costs.

There are in general two types of personal insurance e.g., physical assets and insurable events – under each are various types of insurance cover which will be listed below with a brief description.

PERSONAL INSURANCE - ASSETS

Personal insurance can cover a range of physical assets that an individual and/or family may have. When we look at physical assets that can be insured, we look at the following policy types:

Automobile Insurance: protects you against damage, loss due to an accident or theft of a vehicle and the cost is determined by a combination of an individual’s age, driving experience and history. There are 11 types of motor vehicle insurance i.e., Comprehensive, Liability, Collison, Uninsured / Underinsured motorist, Medical / Personal injury, Gap, Classic Car, Towing / Labor, Rental reimbursement. It may be possible to discount the cost by bundling policies and / or having a deductible amount applied.
House and Content Insurance: generally known as Home Owners Insurance (HOI) will usually combine the damage to or destruction of your home and the loss or theft of your personal property with-in the home. HOI can be customized to the needs / requirements of the insured home and its content. There are 3 types of cover available i.e., replacement cost, cash value and a combination of both.
Electronics and Appliances Insurance: covers a wide range of electrical items in the home i.e., kitchen appliances to home office equipment including home entertainment devices and electronics used for educational purposes.
Pet Insurance: this insurance policy will basically cover your pet for wellness (check-ups, vaccines, and routine care), illness and accident or a combination of these 3. Most plans will not cover pre-existing conditions.
Jewelry Insurance: with this insurance you’re looking at cash value, replacement cost and repairs. With replacement cost being the best value. Keeping receipts for each asset is important when making a claim.
Antiques and Collectibles Insurance: will more than likely need to be covered separately from HOI as it will either limit the amount insured or exclude coverage all together. The most important element of this insurance is getting the assets appraised / valued by a reputable certified appraiser / valuer who is recognized by the insurer.
Travel Insurance: works by providing you with cover that can vary from accidents, lost property, theft, cancellations and most importantly emergency medical assistance.
Recreational Vehicle Insurance: with this insurance you are insuring boats, any water craft, off-road vehicles, motor homes, travel trailers and 5th wheel vehicles.

PERSONAL INSURANCE - EVENTS

With personal events insurance there is a broad range of policies’ available as listed below:

Life Insurance: provides a payment to designated beneficiaries upon the death of the insured individual. The amount of the payment can vary depending on the type of life insurance policy taken and the agreed upon sum assured. Below is a list of the types of life insurance generally available.

Term Insurance: provides death cover for a specific period of time with a fixed / level premium to be paid during that period and a fixed sum assured. Some policies will offer a decreasing sum assured whilst others will offer increasing sums assured including the option to convert to permanent insurance which has no expiration and usually includes a saving option along with the death benefit.

Whole of Life: is also called straight / ordinary life and is also known as permanent / traditional life insurance. This policy is guaranteed to remain in force so long as premiums are paid and the individual insured remains alive. Another element is the savings component of this policy which allows the insured to partially withdraw a sum in cash or to borrow against the cash component of the policy. There are also tax benefits to this type of policy and it is also known as an Insurance Bond in some countries and provides for premiums / payments to be placed into a unit linked investment fund.

Endowment: is a policy that can be considered a saving plan that provides for fixed payment and a guaranteed sum assured to be paid out at a pre-determined time or upon the death of the insured whichever comes first. Another feature of an endowment policy is the option to participate in profits or to have it unit linked to investment funds. There are different types of endowment policies i.e. with-profits endowments, low-cost endowments, low-start endowments, unit-linked endowments, guaranteed bonds (single premium endowments), guaranteed income or growth bond. The popularity for endowment policies has waned over the years in some countries.

Universal Life (UL): is another permanent life insurance policy that is considered to be the most flexible as it provides for flexibility in premium payments with adjustable death benefits along with a cash component which can be borrowed against or used to pay premiums. Premiums have 2 components e.g.; 1 part represents the cost of insurance and the 2nd part is the savings component which represents the cash value accumulated with interest paid set by the insurance company. The one disadvantage of this type of policy is that the cost of insurance (premium payments) will go up over time as the insured ages. There are certain tax benefits attached to this type of policy and tend to work on a tax-deferred basis.

Variable Universal Life (UVL): is the type of policy that provides for the potential to see growth in the cash component as it can be invested in unit linked investment funds. The significant difference between UVL and UL policies is that the cash component is placed in a separately managed accounts known as sub-accounts, with the death benefit being in its own account. With a VUL policy premium payments for the death benefit and administration costs can be paid out of the cash components the underlying investments from the unit linked investment funds. Should the invested funds incur sustained significant losses premium payments may go up to cover the costs of insurance and rebuild the cash value.

Insurance riders: riders can provide additional benefits to a life insurance policy and cover such events as accidental and accelerate death benefits; wavier and return of premiums; family income benefit and guaranteed insurability; child term and long-term care.

Trauma / Critical Illness Insurance: this type of policy covers some cancers, various heart conditions including stroke and other terminal illnesses and conditions. It pays out a lump sum that can be used to pay medical expenses including nursing care, therapy, pay off debts, make adjustments / renovations to a home or vehicle or provide a cash buffer. This type of policy will generally not cover mental health conditions and may have some tax benefits when paid out.

Total and Permanent Disability Insurance (TPD): this policy pays out a lump sum and covers total and permanent disability as defined specifically in the policy terms which generally means the inability to return to work. It is important that the definition covers your own occupation to get the best possible cover. In some countries TPD cover is provided as a part of a superannuation plan and is very general in its definition as to what is considered an occupation and may not cover a claim where any occupation can be taken up by the insured.

Disability Insurance (DL): is a replacement income policy that will pay a monthly amount based on a percentage of your salary due to illness or injury. This type of policy cover can pay out for a period set from 3 months to 5 years or longer and activation of the policy can be dependent on the covered period. The cost of the premium can be based on a percentage of a yearly salary. This policy will generally not cover medical and long-term care costs.

Personal Liability Insurance: this insurance covers events in which an accident occurs in or out of a person’s home that result in injury or damage. It is also known as Comprehensive Personal Lability (CPL) insurance and can be part of an HOI policy and is also considered 3rd party insurance. In essence personal liability insurance covers claims for liability due to bodily injury or property damage that are related to personal activities. This cover does not cover mishaps to you but mishaps to other people that you inadvertently caused by you or you could be held responsible for.

Umbrella Insurance: this is a type of personal liability insurance that is represented by larger sum assured on top of a standard personal liability policy and becomes activated once the standard policy has been fully utilized. Such a policy is usually put in place when there are considerable assets or potential liabilities due to dangerous activities or events.

Health Insurance (HI): there are 2 types of health insurance i.e., public through the government and private through the market or the employer. HI will generally cover medical, doctor, hospital, prescription drugs and wellness plans but will not cover, in most cases, cosmetic or elective procedures or treatments, unapproved drugs and their un-approved use including unapproved medical products or services.

Income Protection Insurance: is also know as redundancy or unemployment cover. Whilst most income protection policies provide cover as a result of being made redundant it is possible to get more comprehensive cover to include accident or sickness which results in unemployment. This normally includes a waiting period and will cover only a specific set time of anywhere from a few months up to 24 months and provide cover that can vary and include specifically mortgage, loan and credit card payments as well as a percentage of a salary to be replaced.

The relevance of insurance is covered further in Module 2 "Structure" and will provide further insight into how insurance cover is relevant to a financial advice and its significance in protecting potential financial outcomes.

IMPORTANT NOTE : it is important to keep in mind that in all cases there is a need to keep receipts for assets insured and where needed appraised / valued prior to being insured. To reduce premiums / payments for any given insurance policy it is possible, in most cases, to negotiate an excess in which the insured will pay a fixed sum before the insurance policies cover comes into effect or activated. Another way to reduce premiums / payments would be to exclude certain types of cover with-in a policy where it is determined that such cover is not relevant to the person or asset insured or the occurrence of an event. In most cases premiums can be tax-deductible or benefits tax-free or tax-deferred. Whilst every effort has been made to provide information on the various types of insurance policies available it is essential to discuss the appropriateness of any insurance cover sought with a licensed / registered professional.

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Current Situation & Profile - Module 1.3 Estate Planning

Tue, 02 Feb 2021 08:29:51 GMT

There are 4 types of Wills:

1. A Simple Will – states who the beneficiaries are and what they receive.

2. A Joint Will – is signed by more than one Testator usually a husband and wife.

3. A Living Will – basically outlines what you want to happen due to incapacitation or terminal illness and provides medical directives on how you should receive medical treatment.

4. A Testamentary Trust Will – is a trust set-up through the last Will and Testament and is usually done to protect children and others regarding the disposition of the Testators property for a given time frame. With a Trust comes the assigning of a guardian to take care of children and others as stated in the Will; as an Executor’s purpose is primarily to ensure that distributions from the estate take place in accordance with the Testator’s wishes.

It should be noted that whilst I have described 4 types of Wills, they can be bundled together to form part of the Estate Planning process as each type of Will serves a specific purpose.

It is also important to understand that a Power of Attorney (POA) is needed as it works hand in hand with a Will. The POA works whilst the Testator is alive empowering an assigned agent to ensure their business, legal and financial obligations are meet should they become in-capacitated or have a need for someone to act on their behalf; whilst the Will becomes active only upon the death of the Testator.

There are generally 3 types of POA i.e.

1. A General Power of Attorney – is used specifically for assets such as property, investments and financial affairs. It can be set for a limited period (known as a Limited POA) or last indefinitely and is operational only as long as the items covered exist and the persons involved remain alive, of sound mind or in the case of the attorney (the assigned agent) financially solvent.

2. An Enduring Power of Attorney – remains in place even if the Testator becomes incapacitated and is not limited in its function or duration.

3. An Immediate / Springing Power of Attorney – is activated either immediately as said or is activated upon a specific event or time. Both are put in place to cover certain medical events and treatments as would be outlined in a POA.

A POA agent (or attorney) does not have more power than the Testator as a POA can be rescinded and limited in terms of function, as to when it can become active and how long it can be active.

In protecting a Testator’s assets and their disposition before and/or after death the setting up of a trust can be very useful and given the variety of trusts – at last count there are over 15 specific types of trusts – there is one that will suit virtually anyone. There are basically 2 ways to setup a trust - Revocable or Irrevocable. A Revocable Trust (RT) can be modified and cancelled at any time by the Testator (known specifically as the Grantor). An RT can also be known as a Living Trust and is usually set up by an individual who has their property in their name only. The use of such a trust allows control to be maintained by the individual (Grantor) who can receive income generated from the property whilst being held in a tax efficient structure which can also avoid probate. When the Grantor dies or once a triggering provision is activated the trust could be subject to taxes and would then convert to being irrevocable. An Irrevocable Trust (IT) is basically a trust that cannot be modified once it is setup and provides potential tax and creditor shelter for the property held through its structure.

Another tax efficient structure is a Foundation which can provide control over the Testators property (this is known as a Private Foundation) whilst they are alive and also after their death. This structure can allow family members and designated individuals to maintain control over the property held within the foundation including how disbursements from the foundation are conducted. It should be noted that the use of a foundation is to provide donations to select charities and in some cases disbursements to individuals.

When looking at the Estate Planning needs of an investor a financial advisor needs to consider the 3 other modules i.e. module 2 “Structure”, module 3 “Strategy” and module 4 “Cost / Benefit” as such planning can have a significant affect on how those 3 modules are put together, arranged and defined for that specific investor.

The purpose of this article is primarily informational and as such legal advice in the jurisdiction in which the property is held and the tax residence of the Testator should be sought before structuring or setting up an estate plan.

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Investment Advice and Planning: Current Situation & Profile - Module 1.2 Investor Experience and Goals

Sat, 23 Jan 2021 05:24:16 GMT

As the client’s experience is outlined in the evaluation process it becomes important to identify any good or bad encounters, they have had, from any given investment that they had or may be averse too in principle. It also becomes important to measure the investors aversion to risk or as can also be described as market changes and volatility. Each investment will respond differently to social, economic and political events and differently again depending on the geographical location and the underlying currency invested.

With an existing investment portfolio, it becomes essential to ensure that the investments correlate to the investment goals of the investor. When considering investment goals there are a number of factors to take into account as indicated in my previous article “Diversification and Investment Timeframe” and “Managing Expectations” as outlined in a little more detail below i.e.

1. Investment Timeframe – when will the investor need access to the funds invested as this will determine the type of investments selected. Are the funds needed immediately or in a month’s time or in 2 to 3 years’ time or in 5 to 7 years or in 7 to 10 or more years. As we determine the timeframe(s) we start to identify the amount of funds to be allocated across each selected investment. In the selection process we move to the next part in meeting the investors goals through diversification.

2. Diversification – can be a combination of both direct and indirect investing and include various currencies (though it is always wise to keep investments predominately in what I call your cost or expense-based currency). With diversification one objective is to flatten out the volatility of a portfolio of investments and reduce risk while utilizing investment timeframes to achieve results over time. Another important facet of diversification is the blending of investment styles (a particular quality found in managed investment portfolios and to be covered in more detail in future articles as well as details on Alternative Investments) that determines how the underlying investments are selected to create a managed portfolio and to exploit the seasonal nature in the performance of different types of investments and investment management styles. It is important to note that with all investments it is “Time in, not Timing” that provides the best potentially performance and return when investing which leads us to managing an investors expectation.

3. Expectations – managing an investors expectation can be a challenge depending on their investment experience and the goals they wish to achieve. It is important to be open and straight forward with an investor after they have outlined their goals and as investments are identified and selected as to both the upside and the downside (risk / reward) of each investment and how it belongs in a portfolio relative to the investor’s goals.

In many cases an investor will generally fall into one or two categories’ i.e., wealth creation and / or retirement funding. The key point as to which category they predominately fall under will usually be based on their age. Regardless of the category an investor falls under it is important to realize that at some point a goal may shift as circumstances change over time whether personal, political, economic, environmental or a combination of these and other events.

Communication on an ongoing basis with an investor becomes an essential part of how an advisor maintains and builds both the relationship with the investor and sustainability of their business which is covered in Module 4 “Cost / Benefit”.

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_______________________________________________________________________________________________________________________________________

Edward Ketterer has asserted his rights to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988.

Investment Advice and Planning: Current Situation & Profile - Module 1.1 Assets, Debts, Income, Expenses

Mon, 11 Jan 2021 09:39:03 GMT

As we establish the week-to-week, month-to-month and year-to-year in-flows and out-flows to meet expenses, payoff debt, and grow assets we establish financial continuity whilst at the same time providing a financial base from which funds can be allocated to address potential emergencies.

We can then create a distribution ratio that outlines funding options to be established on how in-flows (represented as income i.e. salary, wages, dividends, rent receivable etc...) are spread across as out-flows (distributed income) to meet expenses, payoff debt, to meet current obligations whilst setting aside monies for future financial obligations and requirements as savings and retirement funding which must considered a need rather than a want.

Module 1.1 provides information for the development of a personal financial statement / balance sheet and cash flow statement and is 1 of 4 elements in module 1 that provide a profile from which a client’s financial needs and wants start to form a platform from which Module 2 “Structure” and Module 3 “Strategy” are created.

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_______________________________________________________________________________________________________________________________________

Edward Ketterer has asserted his rights to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988.

The 4 Modules to Investment Advice and Planning

eeketterer1957@gmail.com (Edward Ketterer) — Fri, 04 Dec 2020 10:37:17 GMT

Module 2

Structure – This module represents the 3 foundations from which a client outlines their financial needs in the immediate term and forms the basis for ongoing periodic reviews that represent Module 4 “Cost / Benefit” when it comes to adjusting their financial plan for the medium and long term:

1. Cash

2. Income

3. Growth

Module 3

Strategy – This module outlines a strategy that is a variation on what is known as a “Core+Satellite” investing method. It utilizes a combination of investment time frames, and diversification by combining the various investment/ portfolio strategies utilized in mutual funds / unit trusts, ETFs, structured products and may include alternative investments. Module 1 “Current Situation & Profile” will provide the basis upon which the portfolio is constructed and the way this investing method is put in place. Tied closely to this process is managing a client’s expectations.

Module 4

Cost / Benefit – Change is a fact of life – one’s circumstances change, legislation changes, markets change and keeping up-to-date is an important element in the ongoing development of a strong client relationship and the maintenance of a robust business model. This module provides clarity on how financial professionals charge and what a client receives for the charges incurred:

1. Initial and on-going advice provided through regular periodic reviews of Modules 1, 2 and 3,

2. Consolidated monthly statements of investments with reports specific to the recommended investments,

3. legislative, Tax and Social Security monitoring,

4. investment opportunities and strategies,

5. Specific services – for executives, age pensioners and self-funded retires etc…

6. Client seminars and presentations by investment managers on relevant products and services,

7. Market and economic updates for clients and advisor,

8. Advisor regulatory updates on relevant government legislation, products, and services including required ongoing education.

In the articles to follow I will breakdown each module and outline the process each module covers.

Do more, be more, accomplish more. If you would like help on your journey then I'm here to help you get started.

Don't wait another moment. The time is now. The person is you.

Take the leap and get in touch or follow me https://www.creativecoachonline.com/ or email edward@creativecoachonline.com

_______________________________________________________________________________________________________________________________________

Edward Ketterer has asserted his rights to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988.

Product Push & Transaction Drive to Competitive Advantage

eeketterer1957@gmail.com (Edward Ketterer) — Tue, 24 Nov 2020 09:14:18 GMT

For clients it did not necessarily mean that the product or transaction addressed or meet their needs. For financial professionals this made clear that a business model that did not address the sustainability and development of the relationship could have a direct impact on the operation of the business. For government regulators it became clear that through complaints by the investing public there was a need for change.

As a result of these realizations a move away from a product push and transaction driven business model became key to maintaining and developing the client relationship. This change took the form of providing financial advice and the development of strategies that looked beyond pushing a product or driving a transaction. It became obvious that a broad-based holistic approach into the needs of the client and the appropriateness of a given product or transaction needed to be backed up with a comprehensive understanding of what the client wanted and needed.

Hence the creation of the financial plan that addressed the client’s wants and needs, outlined as a structure that focused on how these wants and needs would be approached with various options for choice and then provided an action plan to put the chosen option or options of the financial plan into operation.

Top the financial plan with ongoing advice and periodic reviews and you can start to see that this business model is far more sustainable as it works towards the development of the client relationship which in turn provides the financial professional with opportunities to address the future needs of the client.

In the articles to follow I will outline a version of this process and then proceed to break the process down into four modules and in turn breakdown each module.

In many ways the video on the “4 Guarantees” included with in the website outlines some of the challenge’s clients can face and touches upon how a financial professional can assist when developing a financial plan. The “4 Guarantees” represents some of the elements that are considered with in a financial plan.

Do more, be more, accomplish more. If you would like help on your journey then I'm here to help you get started.

Don't wait another moment. The time is now. The person is you.

Take the leap and get in touch or follow me https://www.creativecoachonline.com/ or email edward@creativecoachonline.com

_______________________________________________________________________________________________________________________________________

Edward Ketterer has asserted his rights to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988.

Video: The 4 Guarantees

eeketterer1957@gmail.com (Edward Ketterer) — Fri, 25 Sep 2020 13:04:12 GMT

This video: "The 4 Guarantees ” outlines some of the challenge’s clients can face and touches upon how a financial adviser can assist when it comes to managing expectations.

Do more, be more, accomplish more. If you would like help on your journey then I'm here to help you get started.

Don't wait another moment. The time is now. The person is you.

Take the leap and get in touch or follow me https://www.creativecoachonline.com/ or email edward@creativecoachonline.com

_______________________________________________________________________________________________________________________________________

Edward Ketterer has asserted his rights to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988.

What are the answers to the challenges we face today?

Mon, 27 Jul 2020 23:00:00 GMT

One year on New Year’s Eve, I met an active duty special forces general who presented me with a situation – he asked what I would do if I found myself in the freezing cold of the Artic with little to no resources except the clothes on my back with a group of individuals whom I did not know. My response was as follows: I would work towards building a shelter and encourage the other individuals to assist while I found out who they are, their expertise and experience, to identify how each person might contribute to our survival – He nodded and smiled. Similar to the scenario presented, it is my ambition to work with my clients to understand who they are in the situation they find themselves in and to have them identify their expertise and experiences that could effectively address their situation.

My life has been filled with opportunities, some of which I have taken and most of which I did not realize the value of at the time and passed on. However, what I can say is that I have lived my life as I saw fit.

While I have lived well and worked hard to make my way through life, I have always believed in being there for family and for the community I live in. This included caring for my mother in the final years of her life and assisting my father now in his advanced age. I have done so with the belief that whatever has been provided to me from family and community I need to put back into the family and the community either in terms of my time, my experience, or my support in whatever form that might take for their benefit and the benefit of others.

I do so from the experiences that had me journey to the Micronesian island of Yap to live and fish with Thor Heyerdahl’s island navigators. Experiences that include participating in the shooting of one TV mini-series, and 2 movies, acting in one. A life that has included being a disc-jockey and a male model.

In a professional capacity I’ve been registered on two continents and currently active on a third to provide advice and support in investing whether for individuals or institutions, which has included the establishment and development of a financial advisory practice on one continent. Furthermore, I have worked with an NGO to provide services to return displaced East Timor refugees back to their homes. Needless to say, my experiences are diverse and the term jack-of-all trades would be one that definitely applies to me.

I enjoy coaching, mentoring, and consulting with clients to identify solutions and develop action plans that will take them where they want to go. The satisfaction that comes with this is fulfilling to say the least.

In moments of contemplation I reflect upon my 60 years on this world and ask myself how I can make a difference with the perspective I have gained throughout my life.

My realization has been that like throwing a pebble in a pond - being part of the change in the life of one person can have a ripple effect on many others as the change is manifested.

And so, in whatever small way I can improve the human condition I believe greater outcomes can occur, some obvious and immediate and others more subtle and discreet.

My ambition is to better appreciate and understand my client’s needs and aspirations while working with them to bring about change and desired outcomes, and as such improve upon the human condition one person at a time.

Do more, be more, accomplish more. If you would like help on your journey then I'm here to help you get started.

Don't wait another moment. The time is now. The person is you.

Take the leap and get in touch or follow me https://www.creativecoachonline.com/ or email edward@creativecoachonline.com

_______________________________________________________________________________________________________________________________________

Edward Ketterer has asserted his rights to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988.

Managing Expectations

eeketterer1957@gmail.com (Edward Ketterer) — Wed, 15 Jul 2020 09:29:36 GMT

When managing client expectations, it is important to establish where they are currently in their financial situation, what their experience has been when it comes to investing and what they are looking to achieve going forward. The key is communication not just as you establish your initial rapport but on an ongoing basis and scheduling yearly reviews along with seminars relevant to the advice provided and the strategy under pinning their investment portfolio. By doing so you continue to address their expectations in a pro-active fashion that also provides them with an opportunity to approach you directly to arrange a more formal review.

As a client it is important for you to establish the basis upon which your financial advisor provides advice and how the advisor handles your expectations in relation to the structure upon which your portfolio is designed. In many ways the relationship you create with your advisor is similar to that of a Dutch Uncle from whom you get direct, frank answers to educate and inform and in some ways like a father confessor to whom you confide your personal situation and in this case more specifically your financial situation. Your advisor guides you through a process that creates a foundation from which your financial situation can be structured into a strategy that reflects your needs and addresses your expectations. By continuing to attend seminars and schedule regular meeting with your advisor you continue to build upon what you can expect to achieve with your portfolio.

In many ways the video on the “ 4 Guarantees ” included with in this website outlines some of the challenge’s clients can face and touches upon how a financial adviser can assist when it comes to managing expectations.

Do more, be more, accomplish more. If you would like help on your journey then I'm here to help you get started.

Don't wait another moment. The time is now. The person is you.

Take the leap and get in touch or follow me https://www.creativecoachonline.com/ or email edward@creativecoachonline.com

_______________________________________________________________________________________________________________________________________

Edward Ketterer has asserted his rights to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988.

Diversification and Investment Timeframe

Wed, 24 Jun 2020 15:47:17 GMT

“Time In, Not Timing”

If managed portfolios (mutual funds or unit trusts) are used then the investment process they use in the selection of their underlying investments i.e. stocks, bonds, property and cash is the first part of the investment process. Followed by the geographic location of the investment - USA, Australia, Asia, Europe and the underlying currency - US Dollar, Euro, Yuan, Yen, UK Pound is the second part of the investment process. A third part of the investment process might include the use of hedging facilities to offset market and currency risk. These investment processes become important components of diversification and the investment time frame. As you can see the process of selecting an investment can be quite involved.

As a client you need to consider what your goal is in investing… is it for retirement, the purchase of a property, a child’s education… the list can go on. By determining your goal your advisor can outline how money is to be allocated or accumulated with each investment. Along with this is the need to consider your risk tolerance or as stated in the previous paragraph your aversion to market change and volatility which should be considered within the context of when you will be accessing the money to accomplish your goal. The point to remember is that things will change and the value of investments will go down as well as up.

You will find the video on the “4 Guarantees” included with in this website outlines some of the challenge’s clients can face and touches upon how a financial adviser can assist when it comes to Diversification and Investment Time Frame.

Do more, be more, accomplish more. If you would like help on your journey then I'm here to help you get started.

Don't wait another moment. The time is now. The person is you.

Take the leap and get in touch or follow me https://www.creativecoachonline.com/ or email edward@creativecoachonline.com

Edward Ketterer has asserted his rights to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988.