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

A Registered Investment Advisor INVESTMENT & FINANCIAL ADVISORY SERVICES Presentation to SUNY College of Optometry

OUR BELIEFS Service Customized Active support Confidentiality oriented solution Managing client We are available Investment Maintaining client assets is a to clients solution should confidentiality is privilege; not a throughout the match client our duty right relationship requirement Uncomplicated Independence Timely reports fees Unbiased and Straightforward Comprehensive conflict free fee based reports and approach relationship. We continual client are only paid by contact our clients 2

ABOUT US Experience – Clients – Hands Custodian – Extensive experience Global approach on experience Charles Schwab. in a variety of – Domestic and with individual Segregated investments- international and institutional account in client’s traditional and experience clients name alternative Expertise – Network – Strong service Investment Research – Deep experience Tuned in to providers – Internal Internal research in selecting the markets process complemented by the investments, and industry complemented with resources of a multi constructing through a external support from billion dollar independent portfolios, risk broad service providers in investment advisor management and network of custody, operations (Littman Gregory Advisor macro analysis contacts and investments Intelligence) 3

SOLUTIONS PROVIDERS Charles Schwab is the firm’s custodian RIA in a Box helps with registration compliance One of the retirement plan administrators Various vendors support the Firm with data analytics, Various research and operations 4

THE TWO MOST IMPORTANT WORDS FOR ANY DECISION “Know Thyself” – Ancient aphorism 5

INVESTMENT WISDOM... “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 6

RISK AND RETURN Two side of the same coin: Level of potential return is commensurate with the level of expected risk. Risk is normally defined as volatility Investments with relatively high returns normally come with high volatility. Return should be adequate compensation for risk taken. 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. 7

VOLATILITY/STANDARD DEVIATON AS RISK Each band above is one standard deviation. Annual Standard Growth of a Asset class Annual Return Deviation 100K 95% return range 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 ‘Good’ diversification reduces risk more than it reduces returns 8

RISK AND RETURN Source: Sarsi, LLC analysis 9

INVEST FOR THE LONG TERM “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 10

INVEST FOR THE LONG TERM Equity tilted balanced portfolio: Moderate risk Returns as of Period Best Return Worst Return 12/31/2015 49.58 % -35.14% 1-Year 10.90% (period ending June 1983) (period ending Feb 2009) 31.04% -10.42% 3-Year 10.67% (period ending July 1987) (period ending Feb 2009) 26.73% -3.25% 5-Year 10.3% (period ending July 2007) (period ending Feb 2009) 17.86% 0.00% 10-Year 10.70% (period ending Aug 1987) (period ending Feb 2009) Source: Sarsi, LLC analysis 11

MARKET TIMING IS FUTILE Market timing is impossible and only detracts from performance. 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. 12

GOALS BASED INVESTING 1. Short term goals and emergency funds; Cash and cash equivalents: High certainty but low returns 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. 13

FINANCIAL ADVISOR: TRAITS AND ROLE - 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 14

STARTING YOUR PRACTICE: FINANCIAL PERSPECTIVE 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 15

STARTING YOUR PRACTICE: FINANCIAL PERSPECTIVE 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 16

RESOURCES - 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 17

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 . 12

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