FINANCIAL ADVISORY SERVICES Presentation to SUNY College of - - PowerPoint PPT Presentation

INVESTMENT & FINANCIAL ADVISORY SERVICES

Presentation to SUNY College of Optometry

A Registered Investment Advisor

OUR BELIEFS

Service

• riented

Managing client assets is a privilege; not a right Active support We are available to clients throughout the relationship Customized solution Investment solution should match client requirement Confidentiality Maintaining client confidentiality is

• ur duty

Independence Unbiased and conflict free approach Uncomplicated fees Straightforward fee based

• relationship. We

are only paid by

• ur clients

Timely reports Comprehensive reports and continual client contact

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Experience – Extensive experience in a variety of investments- traditional and alternative Expertise – Deep experience in selecting investments, constructing portfolios, risk management and macro analysis Network – Tuned in to the markets and industry through a broad network of contacts Clients – Hands

• n experience

with individual and institutional clients Global approach – Domestic and international experience Strong service providers – Internal process complemented with external support from service providers in custody, operations and investments Custodian – Charles Schwab. Segregated account in client’s name Investment Research – Internal research complemented by the resources of a multi billion dollar independent investment advisor (Littman Gregory Advisor Intelligence)

ABOUT US

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SOLUTIONS PROVIDERS

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Various

Various vendors support the Firm with data analytics, research and operations Charles Schwab is the firm’s custodian RIA in a Box helps with registration compliance One of the retirement plan administrators

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“Know Thyself” – Ancient aphorism THE TWO MOST IMPORTANT WORDS FOR ANY DECISION

INVESTMENT WISDOM...

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“I don’t worry about what the markets will do; I worry about what I will do in response to a market action – Successful money manager. That is: Know Thyself!

... LEADS TO RISK PROFILING...

Ability to take risk: Liquidity needs, stage of life, unique circumstances Willingness to take risk: Psychology, behavioral instinct, herd instinct

... LEADS TO THRESHOLD FOR LOSS

RISK AND RETURN

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Return should be adequate compensation for risk taken. Two side of the same coin: Level of potential return is commensurate with the level of expected risk. Risk is normally defined as volatility

TAKE CARE OF THE DOWNSIDE…

Construct and manage portfolios based on client’s threshold for loss.

…AND THE UPSIDE WILL TAKE CARE OF ITSELF

Monitor portfolios and individual investments for optimal risk adjusted results. Investments with relatively high returns normally come with high volatility.

VOLATILITY/STANDARD DEVIATON AS RISK

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Each band above is one standard deviation. Asset class Annual Return Annual Standard Deviation Growth of a 100K Min Max US Stocks 8.50% 15.20% -21.9% 38.9% 511,205 International 4.40% 16.70% -29.0% 37.8% 236,597 REITS 10.32% 19.47% -28.6% 49.3% 712,993 Fixed Income 5.30% 3.50%

• 1.7%

12.3% 280,910 Cash 2.50% 0.70% 1.1% 3.9% 163,862 Diversified 7.40% 10% -12.6% 27.4% 416,952 95% return range ‘Good’ diversification reduces risk more than it reduces returns

RISK AND RETURN

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Source: Sarsi, LLC analysis

INVEST FOR THE LONG TERM

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“In the short run the market is a voting machine and in the long run it is a weighing machine”- Benjamin Graham Don’t chase fads- construct portfolio in a disciplined manner and rebalance “Activity is the enemy of investment returns” – Warren Buffett Opportunity cost, Transaction costs and taxes cut into performance when trading is excessive "Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas." - Paul Samuelson Individuals should consistently act as investors and not speculators

INVEST FOR THE LONG TERM

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Period Returns as of 12/31/2015 Best Return Worst Return 1-Year 10.90% 49.58 % (period ending June 1983)

• 35.14%

(period ending Feb 2009) 3-Year 10.67% 31.04% (period ending July 1987)

• 10.42%

(period ending Feb 2009) 5-Year 10.3% 26.73% (period ending July 2007)

• 3.25%

(period ending Feb 2009) 10-Year 10.70% 17.86% (period ending Aug 1987) 0.00% (period ending Feb 2009)

Equity tilted balanced portfolio: Moderate risk Source: Sarsi, LLC analysis

MARKET TIMING IS FUTILE

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Investors have to stay in the market- missing large moves makes a big difference in performance. S&P 500 performance 5 year to March 2016: 73% or 11.58%% annualized. S&P 500 performance 5 year to March 2016 if an investor missed the best 5 months during the period: 21% or 3.9% annualized. Market timing is impossible and only detracts from performance.

GOALS BASED INVESTING

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• 2. Investments that beat inflation and improve standard of living: Market based: Reliable long

term returns but relatively high uncertainty over the short term.

• 3. Aspirational investments: Investing in a business or your own company: Relatively high

uncertainty but potential for very high returns.

• 1. Short term goals and emergency funds; Cash and cash equivalents: High

certainty but low returns

FINANCIAL ADVISOR: TRAITS AND ROLE

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• Understand the client and her objectives in order to customize a solution.

Should be a good listener.

• Play the role of a financial coach so that client sticks to a carefully laid out

investment discipline.

• Should be responsive, attentive and personal.
• Alignment of interest with no conflicts.
• High level of expertise to help with complexities.
• Money held with an independent custodian
• Keep fees low and commensurate with value provided

STARTING YOUR PRACTICE: FINANCIAL PERSPECTIVE

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Questions to ask:

• Are you willing to risk loss of income/opportunity costs while the business

builds?

• Are you willing to bear the initial financial uncertainty?
• How much debt are you willing to bear?
• Do you have support from family and friends (Financial and non financial)
• How marketable is your business plan?
• Do business decisions interest you as much as the field of Optometry?

Costs:

• Opportunity cost (Initially)
• Start up costs: Real Estate (Buy or Rent), Equipment (Buy or lease) and

Supplies

• Working capital
• Acquisition cost

STARTING YOUR PRACTICE: FINANCIAL PERSPECTIVE

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Sources of credit:

• Friend and family for equity
• Start up Loans: 1) Bank loan 2) SBA 7A loans
• Working capital lines of credit
• Deferred payment programs for acquisition
• For a self sustaining business: Internally generated excess cash flows

Tips:

• Shop around for loans
• Mix and match: Match maturities
• Grow gradually and don’t borrow to cover operating costs (Unless revolving)
• Explore part time jobs to supplement initial income
• Explore partnerships and acquisitions
• Outsource ancillary functions
• Run a lean business

RESOURCES

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• Industry Association: American Optometric Association (AOA): www.aoa.org
• Broker and Consultant: Practice Consultants: www.practiceconsultants.com
• Broker and Consultant: Practice Concepts: www.practiceconcepts.com
• Consultant: The Williams Group: www.thewilliamsway.com

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Disclaimer: Sarsi LLC (“Sarsi”) is a Registered Investment Advisory Firm regulated by the State of New Jersey in accordance and compliance with applicable securities laws and regulations. Sarsi does not render or offer to render personalized investment advice through this presentation. The information provided herein is for informational purposes only and does not constitute financial, investment or legal advice. Investment advice can only be rendered after delivery of the Firm’s disclosure statement (Form ADV Part II) and execution of an investment advisory agreement between the client and Sarsi.

Thank You

Deva Panambur Managing Director Sarsi, LLC E-Mail: deva@sarsillc.com Phone: 917 446 9601