Financial Planning Video

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Financial Planning

Jonathan: So let me ask you a question. Is this guy falling? What’s going on these days with the market because I have clients that are you know state planning clients that are coming in and they’re just concerned about the weather. Now it’s the right time or they should wait for some sort of correction or what. So I put that up to you. Dominick: As far the as the correction that we’ve already had it, you know the last 18 months has been extremely volatile and if you look back historically you can go back as far as let’s say post World War II. The Best times to do most of your investing have been right after periods that we’re having right now. Whether be the stock market, whether be real estate, I mean let’s face it a lot of what’s been going on with the real estate market is wanted. Jonathan: Or I mean yes, you know you have to look at what you’re situation is in life. Are you in your 30s and 40s? Are you 60s or 70’s you’re looking to preserve, you’re looking to you know loading for growth. When somebody comes to you Karen what source of assessment do you go through before they get involve in some sort of planning? Karen: First you have to ask them a series of questions to make sure that you understand their situation completely. Everyone situation’s different. So first you have to do that and then you kind of basic you know on their goals, time horizons, risk tolerance and so forth where to go from there but just to go back to where you said before you can’t blame investors of feeling the way that they do with what you see in media you know it could scare people especially for not familiar with how markets really operates so— Jonathan: Oh the media is going to sensationalize everything? Dominick: Absolutely. Karen: Yeah. Jonathan: It is always a multiple, whatever it is its time stand because that’s what sales papers, that what keeps people watching TV. Karen: I turn my TV on every morning and it was a joke to watch CNBC to see what the oil prices we’re going to deal. Feel just like a—it was amazing. Jonathan: Is that you spent two hours if the average investors spend two hours just watching CNBC that would be enough to put a great amount of fear into them because they just don’t understand a lot of what’s being said. Another thing this involvement, a lot of people went into this really not having objectives. Not paying attention how am I expose or—well I’m 60 years old and I should have this kind of set up versus what I have now. We stress on at least an annual basis. We evaluate your goals. Karen: Right. Dominick: You risk first and you return because if you don’t do that it could very easily get out of hand and then we get those clients that come to us with completely unrealistically. Karen: Right. Dominick: New clients and we have to say either you have to reevaluate yourself down or we just can’t— Jonathan: How funny you know no matter who I talked to and in any line of work. We talk about our customers who are clients that term of expectation are reasonable or realistic expectations, it always comes up because if you are unreasonable, if you’re dealing with that unreasonable person or that person with unrealistic expectations you’ve never been to satisfy those expectations. Dominick: Losing situations from the get go and— Jonathan: So what are you doing in that point—you know what do you do with that person who has X amount of dollars and once it turn X amount into you know 10 times X. Karen: And we all have clients like that. Dominick: They know we don’t have them because quite frankly return them away. Jonathan: Right. Dominick: You know in an environment that we’re in now— Jonathan: And you have too? Dominick: It’s just not the prudent thing to do for the organization and most important only for the client because if I know going into it with that there is just no way we’re going to be able to produce the results they’re looking for why start the relationship. Karen: Right. Jonathan: In general what are people looking for? Karen: I would have to say—correct me if I’m wrong security first and foremost right now is— Dominick: Preservation. Really in this environment it’s really preservation capital. We’re not seeing to make clients come to a saying you know not to cover off the board. Karen: Right. Dominick: Maximize growth and— Jonathan: Okay so nobody is coming to you because you know you can look at—yeah whenever there is a you know some sort of—I don’t want to use the word crisis but you know you hear the word use so if there’s somebody coming to you saying “look, yeah I know that this whole situation with all prices—the war in Iraq, whatever you want to pick is driving value stock prices down. I want to go to shopping spree. I want to pick as many bargains as I can. You find bargain hunting out there? Dominick: The more educated investor is calling and saying you know double up my equity position or you’re holding cash use it but the average limit especially when you had in demand bank failed. I mean those couple of days yet that we were getting phone calls “is my money safe?” Jonathan: Right. Dominick: Should I sell all of my US agency holdings and put it in treasuries and it’s the worst thing to do. Jonathan: Why? Dominick: During period of vitality personal pricing, you generally get the worst pricing during major periods of vitality. People don’t think clearly that you know though with so with my holdings that’s not the prove thing to do complete panic and I find during this periods when you get most—most people coming to you with those unrealistic goals is during the period that we’re in now. When we see —let’s say period of three years ago which—you know a lot of people coming in. Here’s what we have in the way of assets. This is our fault what do you think? Now we’re getting people. Well this is what I have. This is what I need to be get me there. Jonathan: And is that a realistic goal or— Dominick: I’ll give you first is you have a 10 year US treasury right now selling at around 4%. When you got a client saying I want you to take as little risk as possible and I want you to earn between seven and 9%, that’s unrealistic. Jonathan: And what do you tell me from that client? Do you saved? Dominick: I save. Jonathan: It’s unrealistic? Dominick: It’s a tough conversation because to tell us especially for all the person whose looking to retire, who wants that security to tell them that your object or what you’re looking to return is completely unrealistic. Jonathan: Now let me ask you— Dominick: That says them deeper into panic. Jonathan: Another thing that I find is you know there work beatable business person is going to tell us client the truth. Can always tell them that they want to hear but there’s a lot of competition out there. Dominick: Very, very good point. Jonathan: So what do you do about that? They say they can always go somewhere. Can they always find someone to tell them what they want to hear? Dominick: Objectivity is very difficult to find in this environment because depending on where you are in the financial food chain, you generally have a product to sell myself. None of my people are commissioned. We don’t maintain inventories and products so there’s nothing—I don’t have to sell you a certain product to meet your objective. I’m going to listen to you. We’re going to fill up a financial plan. We’re going to fill up what we call investment policy statement. At the end of the day I’m going to look at it and the term and what products you need. I’m going to go out to the market, various places to get those products versus me pulling those products from one place, very big difference. There are others like us that do that but not many. Karen: Right and to answer you question, if you start selling bridges right they get go—the relationship— Jonathan: And you don’t answer my question. [Laughs] I thought you’re going to answer my question. Karen: But you know if you start a relationship of that way, well yes we’re going to get you 10% so whenever you’re a tax free income it’s not going to happen. All you got to do is ruin a relationship and it’s a re-full business that we work with so not there’s no better fit of doing of that and other institutions of maybe do that possibly, you know probably solve but— Jonathan: Yeah I mean there are like you said there are people out there who are perching products Dominick: Right. Jonathan: And that’s the bread and butter and it’s not really an objective plan that they’re presenting but something that’s gear towards benefiting themselves. Dominick: Perfect example, I’m on this business 24 years and— Karen: Really? Jonathan: Started in six— Karen: Yeah. Dominick: I was always able to sell annuities for less 24 years I’ve sold not one. For simple reason, my own personal philosophy I am not comfortable selling annuities for people. Jonathan: Right. Dominick: What we’re finding in this environment that’s going on a lot. Annuities, there’s just a number of things that you cannot control. You can’t control cause. You cannot asset quality. You cannot control duration of maturities and the main thing is you have to assure that the company you have this annuity with 10 20 30 years down the road when you’re going to need those dollars still going to be around to pay you on that annuity. Jonathan: It’s interesting because when I first started investing in this time now, I’m going to practice 20 years, just about 20 years. It’s almost 19 years and when I started investing in the market I was not looking to make a million dollars on a dollar. Yeah this wasn’t—I want to know what my money would be a preservation. I can always consider myself a safe investor and I always want to do invest one of the rules that I have may still have. I want to know the company what’s going to be next 20 years but you know look at 1001 and you look at somebody’s companies and it’s pretty scary (Voice overlap). At the same time you look at the company like Disney because I’m a big fan of and another invested and you just wonder you know its going to be here but where is it going to be and I still look at to something like Disney. Start by making preservation more than growth. How do you feel about that? Dominick: Its tough caller. It’s really a tough call. With Disney they’re so diverse that you think that it’s an evolutionary company. This is kind of 20 years ago. Disney was a growth company. 10 years ago it was a growth company with slower growth. Now you would consider a more mature company where the growth has clearly slowed from simple reason is now become an entertainment can glamour it. And the one good thing you can say about that is in better environments Disney is proven now that they can earn money whether it’s good or bad. Historically 20 years ago, Disney would not have been able to produce predictable results like that. Jonathan: Well will they just—if they were still a company that relied on theme park attendance and they have these problem but you know there will be ESPN, ABC, all of that. Dominick: Diversifies or revenues. Karen: Speaking of that they just raise their prices it was just on TV that Disney raise their 2 days hot or pass. Jonathan: Oh boy great. Karen: Which you haven’t seen an increase in a while though. Jonathan: You know what it just seem so expensive to begin with. Karen: I’m from Florida so Disney was like you know four time five time 10 time a year so when they’re announcing now that they’re raising a prices they’re open to like everyone else. Dominick: Absolutely Jonathan: Who is the average client for you? Dominick: In a way of—you know I just to profession, asset— Jonathan: And you know what we were looking for basically what kind of person generally will kind of money’s you bring it to the table. Is usually somebody who has been doing investing on his own for a while or has double somebody for a while is looking for somebody new? Karen: Say myself which is a little bit different to Dominick because I’m more out in the field and the branches and dealing with you know associates of the company that we have a profile that I would say you know liquid invest blast it’s a million and over. It doesn’t serve necessarily mean that’s an educated investor. Sometimes quite the opposite and then kind of surf in there on the personal side and then Dominick does a lot with more the larger institutions which is you know different profile. Dominick: The main thing for me is having realistical. You know I can bend that rule of a million dollars and have some will come in with 500,000 if they got very realitiscals and if I see that it is a real big need for us to help them. You know I found back around during our tragic period of 911, there was a lot of unscrupulous people— Jonathan: I’m sure you sort— Dominick: You know taking advantage of some of the 911 with those and just not putting them into things that they belong and you know we had a number of those people come to us and at the time they didn’t meet on minimums and I said listen and I went to my superior and so we’ve got to help this people and we did and you know I know in my heart we made difference in our lives. There’s no way around it. If they had gone alternate routes I truly feel it wouldn’t been in products that they just did need to be in. Karen: Right. Jonathan: You know it’s interesting because when I started my practice I said that I would not turn on the case because it didn’t have enough value and I was looking for three criteria and that’s in case now. If there was negligence and then negligence cause an injury and there was a source of recovery let’s say an insurance company then I would and as it then fought back which is the client/’s expectation. Client’ comes in. It’s realistical a small case maybe it’s worth real $4,000.00, maybe $5,000.00. The client doesn’t think it’s a $50,000.00 case and I feel I can help uh-uh I can involve and I still do that today because it’s that service. You know its providing that service, satisfying that client and you know ultimately in the business world was most your business come from, word of mouth, your files do the right thing. You know— Karen: Oh some just got to do a right thing. Jonathan: Oh you say that and I say that. Karen: It’s a sign of his desk you didn’t see it? Jonathan: She’s doing the right thing a sort of movie. Dominick: Although you know what for me, I live in a community. I worked in a community as service to the community. So for me becomes a personal thing. Jonathan: How many years have you been now? Dominick: 11. Jonathan: Okay and you’re in the same community, same areas? Dominick: Yeah. An area is in really a week— Jonathan: Circles and every small so now you keep seeing this area. Dominick: It’s not a week that goes by where I'm off or I’m going store—where I don’t see a client or I don’t see someone who knows a client. So to me that makes—it does make a difference when you live and work in a community. Jonathan: That you serve? Karen: And I don’t think you don’t realize how much that’s true the statement go off tense a little bit but I just relocated from Florida nine months eight months nine month ago and so I’m now you know meeting new people, meeting new clients. Bringing clients in, I would say 95% of the people that I brought in completely self source Dominick had nothing to do it. Dominick new already, he knew more about the financial picture that I did after I’ve meeting with them. So its definitely a small niche but truthly you have to just you know in my opinion do what’s right. Jonathan: And you mean a good point of where—it kind of like tested but there are people who are worth million of dollars that really have no idea. Karen: I would say more so than none. Jonathan: Really I know it did. There a we—we speak to clients in our state department that you know just never edit, they don’t even have a will. Karen: Right. Jonathan: They don’t have anything. They have no plan and unfortunately there are times when we’ll get a call from the family when it’s too late. When now there’s a big problem because this much plenty wasn’t done. Karen: Right. Jonathan: Real basic planning where somebody now is too sick to make decisions about this help or you know whatever. I mean we talk about that forever. Dominick: As soon as I see someone come to us where we know they hit the state living I strongly encourage them to see counsel. Jonathan: And that’s part of the job I think. I think the— Dominick: Absolutely. Jonathan: Part of planning is they planning—financial planning and all the state planning and vice-versa because it’s like you said money, preservation of assets, preservation of wealth. Karen: Right. Dominick: I tell them and here’s the thing I try when they immediately tell “well I think about it or not right now” and I’ll say well you spent at least 34 years accumulating this dollars and you’re asking me to preserve the dollars and pay an income strain yet you’re not concerned once you’re gone that probably half of this assets a goal to just evaporate to Uncle Sam because you did not do the proper planning. Jonathan: What do you think their related to plan from the standpoint? Dominick: I think the thought at least what I see— Jonathan: Obvious same thing as here. Dominick: The thought of death scares them. Jonathan: It’s kind of ironic in sense that I’ve thought the clients about why you don’t have a will. We want to think about that but the ironic part that once you actually sign that will and you put it away, you don’t think about it anymore. It’s nothing to think about and until you do you’re always going to be thinking about it. Dominick: Exactly. Jonathan: And it comes up time and time again and you know when you recover significant amount of money for somebody, I think part of my job is to recommend that they protect their assets. Let me ask you something else. Short term of investing versus long term investing, you know you find that people come in and let’s say I’m in my late 60s. I’m thinking about retiring. I want to—you know people live in longer longer this days so I’m just wondering do you put it something together that this teller towards the next 10 years or what do you do? Dominick: Okay. Karen: I just had to this several. Every other day and you know— Dominick: There was no rule of thumb that still kind of pertains on Wall Street. Generally its 100 minus your age. Plus or minus, you know five or 10 is how you should be exposed to the stock market. Karen: All right so if you’re 60— Dominick: So someone coming to you— Karen: It’s like a 100-60? Dominick: Say 65 who was what I would classify a moderate investor. Someone who’s not very conservative and someone who’s not aggressive. Someone kind of middle of the road. They should be expose approximately 35% to the stock market. Jonathan: So you should have your age— Dominick: And age it does dictate. Age and years to retire or years to when you’re going to draw down on those assets thus coming to play as far as you’re exposure or the mix between cash, stocks and bonds. Jonathan: So since I’m 29. Okay I’ll be 30 next week. No but so if I’m 65 years old and I should have 65% of my assets and safety is always. Dominick: In income generating assets. Jonathan: Okay. Karen: In conjunction with. Dominick: Again you might have someone who at the age 65 was a business owner and is a custom to taking larger amounts of risk and he might have a portfolio elsewhere or she might have a portfolio elsewhere and they say to you well here I know what you’re telling me but I really would like you to be expose not 35% stocks but 70. This is someone who’s educated. Who has said to you that got portfolio else where. They realized what you they understand what you’ve said but they want this. Jonathan: Right. Karen: With their goals in mind. Let say the same individuals going to buy a retirement house and you know three years and needs a lump sum of money. All of this comes into play. Dominick: We have a lot, Karen she’s a lot of business owners where they sell a piece of property or an asset and come into million to million dollars and I’ll say well I’m going to need this money to buy than the piece of property in two years or three years. Now Karen comes to me and says Dom you know we need to do an investment proposal knowing they need those dollars in two or three years. I cannot out them in the stock market. They can afford the ups and down that we’re saying or that you do see our daily basis. They need to know that principle is going to be there in two or three years. Karen: Right. Dominick: So I put that in safe income generating products. Jonathan: But you make sure that they understand that two years from now their goals will be met. Dominick: Right. Jonathan: And you’re okay. Dominick: I’ve always taking the approach whether it’s an individual client or institution to manage the end game. Manage where you want to be 10 years from now. Five 10 20 years now versus well I lost 3% this month or you know the market was up 5% for the quarter and I was only at four. Jonathan: Right. Dominick: Don’t manage the short term. Manage the end game. It makes a very big difference in the way we manage the assets. I think it helps people sleep better at night. Jonathan: Oh yeah absolutely. I mean if you’re a type of a person who checks everyday to see the ups and downs where you are I think that you probably I mean especially during this times I have trouble sleeping at night. Dominick: And that’s when people become emotional is generally when the worst decisions are made. Karen: Right. Jonathan: So what’s your advice for people? Don’t watch the news, don’t listen to the news? Listen to it but— Dominick: No, listen to it but keep at the back of your mind what your objectives are you. Karen: Right. Dominick: I would be willing to say the half of the average person who comes to us does not have any objective in their mind whatsoever they come to us. Well you know we have a five page document and what’s called a recent policy statement but we go through a questions to determine what it is they want and most importantly what they don’t want. Karen: Right. Dominick: We put in front of the average person that they just sit there and can answer most of the questions. Well I have to take this home because I’d never thought it about before. Jonathan: Yeah people don’t think about risk policy. I think about preserving their money, their assets and then taking money. Dominick: Right. So I would just say this environment if you have goals r-evaluate them and if you don’t get yourself a set of goals for the end game. Jonathan: What is it part of your job—your part of your job then is to help them find what their roles are. Karen: Absolutely. We were talking about the client’s expectations. We put that expectation down there. Listen you’re not going to manage to the short term every month, everyday, every hour. It’s a long term process and a long term goal that’s what we’re going after. So we set the expectation as well as you know what the client expectations are. Jonathan: What do you think the out look is you know for the next ten years as you— Dominick: I look for— Jonathan: For the market. You know— Dominick: We don’t go up beyond 18 months. Here go manage the end game. Someone 10 years out, I would say this historically since World War II stocks were up around they living in a half percent on average on annual basis. Now history can be no guarantee of what’s going to go on to the future but I think it would be a fairly accurate statement to say that overtime stocks should out performed fix income investment such as bonds. Jonathan: Right. You know you talk about stocks and I think about the country and I think about, you know I’m a speech right of the next person but I think about the crisis that we’re going through now and the guess prices and what you’re seeing on housing you know it seems like this guys is falling and I’ve heard people talking in that sense but when I looked back in history, you look it back to the people who survive the depression. Now the country made it to the depression of World War I or World War II, in Vietnam and in this all crisis you know you can go through history and guess what the country still standing. If there was to which period of strength and inspires down. Dominick: And if you look all those periods the stock market was down. Generally anyway between 12 to 24 months after all those period you just mentioned the mark was dramatically higher. Karen: Dominick let me ask your opinion, what do you think between equity indexes or just hand picking equities to themselves? Dominick: That really depends on the person, the type of portfolio you’re going to build. Generally you know Karen mentioning baskets that you could actually go out now and buy indexes and that’s more what we call passive investing. Jonathan: Yeah to get depends on the person and the what— Dominick: Depends on the person and the objectives. Jonathan: Did it more and so far herself incapable hands and hope that you know entrust to make the right decision with them or for them or help them make the right decision.

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Jonathan: So let me ask you a question. Is this guy falling? What’s going on these days with the market because I have clients that are you know state planning clients that are coming in and they’re just concerned about the weather. Now it’s the right time or they should wait for some sort of correction or what. So I put that up to you.

Dominick: As far the as the correction that we’ve already had it, you know the last 18 months has been extremely volatile and if you look back historically you can go back as far as let’s say post World War II. The Best times to do most of your investing have been right after periods that we’re having right now. Whether be the stock market, whether be real estate, I mean let’s face it a lot of what’s been going on with the real estate market is wanted.

Jonathan: Or I mean yes, you know you have to look at what you’re situation is in life. Are you in your 30s and 40s? Are you 60s or 70’s you’re looking to preserve, you’re looking to you know loading for growth. When somebody comes to you Karen what source of assessment do you go through before they get involve in some sort of planning?

Karen: First you have to ask them a series of questions to make sure that you understand their situation completely. Everyone situation’s different. So first you have to do that and then you kind of basic you know on their goals, time horizons, risk tolerance and so forth where to go from there but just to go back to where you said before you can’t blame investors of feeling the way that they do with what you see in media you know it could scare people especially for not familiar with how markets really operates so—

Jonathan: Oh the media is going to sensationalize everything?

Dominick: Absolutely.

Karen: Yeah.

Jonathan: It is always a multiple, whatever it is its time stand because that’s what sales papers, that what keeps people watching TV.

Karen: I turn my TV on every morning and it was a joke to watch CNBC to see what the oil prices we’re going to deal. Feel just like a—it was amazing.

Jonathan: Is that you spent two hours if the average investors spend two hours just watching CNBC that would be enough to put a great amount of fear into them because they just don’t understand a lot of what’s being said. Another thing this involvement, a lot of people went into this really not having objectives. Not paying attention how am I expose or—well I’m 60 years old and I should have this kind of set up versus what I have now. We stress on at least an annual basis. We evaluate your goals.

Karen: Right.

Dominick: You risk first and you return because if you don’t do that it could very easily get out of hand and then we get those clients that come to us with completely unrealistically.

Karen: Right.

Dominick: New clients and we have to say either you have to reevaluate yourself down or we just can’t—

Jonathan: How funny you know no matter who I talked to and in any line of work. We talk about our customers who are clients that term of expectation are reasonable or realistic expectations, it always comes up because if you are unreasonable, if you’re dealing with that unreasonable person or that person with unrealistic expectations you’ve never been to satisfy those expectations.

Dominick: Losing situations from the get go and—

Jonathan: So what are you doing in that point—you know what do you do with that person who has X amount of dollars and once it turn X amount into you know 10 times X.

Karen: And we all have clients like that.

Dominick: They know we don’t have them because quite frankly return them away.

Jonathan: Right.

Dominick: You know in an environment that we’re in now—

Jonathan: And you have too?

Dominick: It’s just not the prudent thing to do for the organization and most important only for the client because if I know going into it with that there is just no way we’re going to be able to produce the results they’re looking for why start the relationship.

Karen: Right.

Jonathan: In general what are people looking for?

Karen: I would have to say—correct me if I’m wrong security first and foremost right now is—

Dominick: Preservation. Really in this environment it’s really preservation capital. We’re not seeing to make clients come to a saying you know not to cover off the board.

Karen: Right.

Dominick: Maximize growth and—

Jonathan: Okay so nobody is coming to you because you know you can look at—yeah whenever there is a you know some sort of—I don’t want to use the word crisis but you know you hear the word use so if there’s somebody coming to you saying “look, yeah I know that this whole situation with all prices—the war in Iraq, whatever you want to pick is driving value stock prices down. I want to go to shopping spree. I want to pick as many bargains as I can. You find bargain hunting out there?

Dominick: The more educated investor is calling and saying you know double up my equity position or you’re holding cash use it but the average limit especially when you had in demand bank failed. I mean those couple of days yet that we were getting phone calls “is my money safe?”

Jonathan: Right.

Dominick: Should I sell all of my US agency holdings and put it in treasuries and it’s the worst thing to do.

Jonathan: Why?

Dominick: During period of vitality personal pricing, you generally get the worst pricing during major periods of vitality. People don’t think clearly that you know though with so with my holdings that’s not the prove thing to do complete panic and I find during this periods when you get most—most people coming to you with those unrealistic goals is during the period that we’re in now. When we see —let’s say period of three years ago which—you know a lot of people coming in. Here’s what we have in the way of assets. This is our fault what do you think? Now we’re getting people. Well this is what I have. This is what I need to be get me there.

Jonathan: And is that a realistic goal or—

Dominick: I’ll give you first is you have a 10 year US treasury right now selling at around 4%. When you got a client saying I want you to take as little risk as possible and I want you to earn between seven and 9%, that’s unrealistic.

Jonathan: And what do you tell me from that client? Do you saved?

Dominick: I save.

Jonathan: It’s unrealistic?

Dominick: It’s a tough conversation because to tell us especially for all the person whose looking to retire, who wants that security to tell them that your object or what you’re looking to return is completely unrealistic.

Jonathan: Now let me ask you—

Dominick: That says them deeper into panic.

Jonathan: Another thing that I find is you know there work beatable business person is going to tell us client the truth. Can always tell them that they want to hear but there’s a lot of competition out there.

Dominick: Very, very good point.

Jonathan: So what do you do about that? They say they can always go somewhere. Can they always find someone to tell them what they want to hear?

Dominick: Objectivity is very difficult to find in this environment because depending on where you are in the financial food chain, you generally have a product to sell myself. None of my people are commissioned. We don’t maintain inventories and products so there’s nothing—I don’t have to sell you a certain product to meet your objective. I’m going to listen to you. We’re going to fill up a financial plan. We’re going to fill up what we call investment policy statement. At the end of the day I’m going to look at it and the term and what products you need. I’m going to go out to the market, various places to get those products versus me pulling those products from one place, very big difference. There are others like us that do that but not many.

Karen: Right and to answer you question, if you start selling bridges right they get go—the relationship—

Jonathan: And you don’t answer my question. [Laughs] I thought you’re going to answer my question.

Karen: But you know if you start a relationship of that way, well yes we’re going to get you 10% so whenever you’re a tax free income it’s not going to happen. All you got to do is ruin a relationship and it’s a re-full business that we work with so not there’s no better fit of doing of that and other institutions of maybe do that possibly, you know probably solve but—

Jonathan: Yeah I mean there are like you said there are people out there who are perching products

Dominick: Right.

Jonathan: And that’s the bread and butter and it’s not really an objective plan that they’re presenting but something that’s gear towards benefiting themselves.

Dominick: Perfect example, I’m on this business 24 years and—

Karen: Really?

Jonathan: Started in six—

Karen: Yeah.

Dominick: I was always able to sell annuities for less 24 years I’ve sold not one. For simple reason, my own personal philosophy I am not comfortable selling annuities for people.

Jonathan: Right.

Dominick: What we’re finding in this environment that’s going on a lot. Annuities, there’s just a number of things that you cannot control. You can’t control cause. You cannot asset quality. You cannot control duration of maturities and the main thing is you have to assure that the company you have this annuity with 10 20 30 years down the road when you’re going to need those dollars still going to be around to pay you on that annuity.

Jonathan: It’s interesting because when I first started investing in this time now, I’m going to practice 20 years, just about 20 years. It’s almost 19 years and when I started investing in the market I was not looking to make a million dollars on a dollar. Yeah this wasn’t—I want to know what my money would be a preservation. I can always consider myself a safe investor and I always want to do invest one of the rules that I have may still have. I want to know the company what’s going to be next 20 years but you know look at 1001 and you look at somebody’s companies and it’s pretty scary (Voice overlap). At the same time you look at the company like Disney because I’m a big fan of and another invested and you just wonder you know its going to be here but where is it going to be and I still look at to something like Disney. Start by making preservation more than growth. How do you feel about that?

Dominick: Its tough caller. It’s really a tough call. With Disney they’re so diverse that you think that it’s an evolutionary company. This is kind of 20 years ago. Disney was a growth company. 10 years ago it was a growth company with slower growth. Now you would consider a more mature company where the growth has clearly slowed from simple reason is now become an entertainment can glamour it. And the one good thing you can say about that is in better environments Disney is proven now that they can earn money whether it’s good or bad. Historically 20 years ago, Disney would not have been able to produce predictable results like that.

Jonathan: Well will they just—if they were still a company that relied on theme park attendance and they have these problem but you know there will be ESPN, ABC, all of that.

Dominick: Diversifies or revenues.

Karen: Speaking of that they just raise their prices it was just on TV that Disney raise their 2 days hot or pass.

Jonathan: Oh boy great.

Karen: Which you haven’t seen an increase in a while though.

Jonathan: You know what it just seem so expensive to begin with.

Karen: I’m from Florida so Disney was like you know four time five time 10 time a year so when they’re announcing now that they’re raising a prices they’re open to like everyone else.

Dominick: Absolutely

Jonathan: Who is the average client for you?

Dominick: In a way of—you know I just to profession, asset—

Jonathan: And you know what we were looking for basically what kind of person generally will kind of money’s you bring it to the table. Is usually somebody who has been doing investing on his own for a while or has double somebody for a while is looking for somebody new?

Karen: Say myself which is a little bit different to Dominick because I’m more out in the field and the branches and dealing with you know associates of the company that we have a profile that I would say you know liquid invest blast it’s a million and over. It doesn’t serve necessarily mean that’s an educated investor. Sometimes quite the opposite and then kind of surf in there on the personal side and then Dominick does a lot with more the larger institutions which is you know different profile.

Dominick: The main thing for me is having realistical. You know I can bend that rule of a million dollars and have some will come in with 500,000 if they got very realitiscals and if I see that it is a real big need for us to help them. You know I found back around during our tragic period of 911, there was a lot of unscrupulous people—

Jonathan: I’m sure you sort—

Dominick: You know taking advantage of some of the 911 with those and just not putting them into things that they belong and you know we had a number of those people come to us and at the time they didn’t meet on minimums and I said listen and I went to my superior and so we’ve got to help this people and we did and you know I know in my heart we made difference in our lives. There’s no way around it. If they had gone alternate routes I truly feel it wouldn’t been in products that they just did need to be in.

Karen: Right.

Jonathan: You know it’s interesting because when I started my practice I said that I would not turn on the case because it didn’t have enough value and I was looking for three criteria and that’s in case now. If there was negligence and then negligence cause an injury and there was a source of recovery let’s say an insurance company then I would and as it then fought back which is the client/’s expectation. Client’ comes in. It’s realistical a small case maybe it’s worth real $4,000.00, maybe $5,000.00. The client doesn’t think it’s a $50,000.00 case and I feel I can help uh-uh I can involve and I still do that today because it’s that service. You know its providing that service, satisfying that client and you know ultimately in the business world was most your business come from, word of mouth, your files do the right thing. You know—

Karen: Oh some just got to do a right thing.

Jonathan: Oh you say that and I say that.

Karen: It’s a sign of his desk you didn’t see it?

Jonathan: She’s doing the right thing a sort of movie.

Dominick: Although you know what for me, I live in a community. I worked in a community as service to the community. So for me becomes a personal thing.

Jonathan: How many years have you been now?

Dominick: 11.

Jonathan: Okay and you’re in the same community, same areas?

Dominick: Yeah. An area is in really a week—

Jonathan: Circles and every small so now you keep seeing this area.

Dominick: It’s not a week that goes by where I'm off or I’m going store—where I don’t see a client or I don’t see someone who knows a client. So to me that makes—it does make a difference when you live and work in a community.

Jonathan: That you serve?

Karen: And I don’t think you don’t realize how much that’s true the statement go off tense a little bit but I just relocated from Florida nine months eight months nine month ago and so I’m now you know meeting new people, meeting new clients. Bringing clients in, I would say 95% of the people that I brought in completely self source Dominick had nothing to do it. Dominick new already, he knew more about the financial picture that I did after I’ve meeting with them. So its definitely a small niche but truthly you have to just you know in my opinion do what’s right.

Jonathan: And you mean a good point of where—it kind of like tested but there are people who are worth million of dollars that really have no idea.

Karen: I would say more so than none.

Jonathan: Really I know it did. There a we—we speak to clients in our state department that you know just never edit, they don’t even have a will.

Karen: Right.

Jonathan: They don’t have anything. They have no plan and unfortunately there are times when we’ll get a call from the family when it’s too late. When now there’s a big problem because this much plenty wasn’t done.

Karen: Right.

Jonathan: Real basic planning where somebody now is too sick to make decisions about this help or you know whatever. I mean we talk about that forever.

Dominick: As soon as I see someone come to us where we know they hit the state living I strongly encourage them to see counsel.

Jonathan: And that’s part of the job I think. I think the—

Dominick: Absolutely.

Jonathan: Part of planning is they planning—financial planning and all the state planning and vice-versa because it’s like you said money, preservation of assets, preservation of wealth.

Karen: Right.

Dominick: I tell them and here’s the thing I try when they immediately tell “well I think about it or not right now” and I’ll say well you spent at least 34 years accumulating this dollars and you’re asking me to preserve the dollars and pay an income strain yet you’re not concerned once you’re gone that probably half of this assets a goal to just evaporate to Uncle Sam because you did not do the proper planning.

Jonathan: What do you think their related to plan from the standpoint?

Dominick: I think the thought at least what I see—

Jonathan: Obvious same thing as here.

Dominick: The thought of death scares them.

Jonathan: It’s kind of ironic in sense that I’ve thought the clients about why you don’t have a will. We want to think about that but the ironic part that once you actually sign that will and you put it away, you don’t think about it anymore. It’s nothing to think about and until you do you’re always going to be thinking about it.

Dominick: Exactly.

Jonathan: And it comes up time and time again and you know when you recover significant amount of money for somebody, I think part of my job is to recommend that they protect their assets. Let me ask you something else. Short term of investing versus long term investing, you know you find that people come in and let’s say I’m in my late 60s. I’m thinking about retiring. I want to—you know people live in longer longer this days so I’m just wondering do you put it something together that this teller towards the next 10 years or what do you do?

Dominick: Okay.

Karen: I just had to this several. Every other day and you know—

Dominick: There was no rule of thumb that still kind of pertains on Wall Street. Generally its 100 minus your age. Plus or minus, you know five or 10 is how you should be exposed to the stock market.

Karen: All right so if you’re 60—

Dominick: So someone coming to you—

Karen: It’s like a 100-60?

Dominick: Say 65 who was what I would classify a moderate investor. Someone who’s not very conservative and someone who’s not aggressive. Someone kind of middle of the road. They should be expose approximately 35% to the stock market.

Jonathan: So you should have your age—

Dominick: And age it does dictate. Age and years to retire or years to when you’re going to draw down on those assets thus coming to play as far as you’re exposure or the mix between cash, stocks and bonds.

Jonathan: So since I’m 29. Okay I’ll be 30 next week. No but so if I’m 65 years old and I should have 65% of my assets and safety is always.

Dominick: In income generating assets.

Jonathan: Okay.

Karen: In conjunction with.

Dominick: Again you might have someone who at the age 65 was a business owner and is a custom to taking larger amounts of risk and he might have a portfolio elsewhere or she might have a portfolio elsewhere and they say to you well here I know what you’re telling me but I really would like you to be expose not 35% stocks but 70. This is someone who’s educated. Who has said to you that got portfolio else where. They realized what you they understand what you’ve said but they want this.

Jonathan: Right.

Karen: With their goals in mind. Let say the same individuals going to buy a retirement house and you know three years and needs a lump sum of money. All of this comes into play.

Dominick: We have a lot, Karen she’s a lot of business owners where they sell a piece of property or an asset and come into million to million dollars and I’ll say well I’m going to need this money to buy than the piece of property in two years or three years. Now Karen comes to me and says Dom you know we need to do an investment proposal knowing they need those dollars in two or three years. I cannot out them in the stock market. They can afford the ups and down that we’re saying or that you do see our daily basis. They need to know that principle is going to be there in two or three years.

Karen: Right.

Dominick: So I put that in safe income generating products.

Jonathan: But you make sure that they understand that two years from now their goals will be met.

Dominick: Right.

Jonathan: And you’re okay.

Dominick: I’ve always taking the approach whether it’s an individual client or institution to manage the end game. Manage where you want to be 10 years from now. Five 10 20 years now versus well I lost 3% this month or you know the market was up 5% for the quarter and I was only at four.

Jonathan: Right.

Dominick: Don’t manage the short term. Manage the end game. It makes a very big difference in the way we manage the assets. I think it helps people sleep better at night.

Jonathan: Oh yeah absolutely. I mean if you’re a type of a person who checks everyday to see the ups and downs where you are I think that you probably I mean especially during this times I have trouble sleeping at night.

Dominick: And that’s when people become emotional is generally when the worst decisions are made.

Karen: Right.

Jonathan: So what’s your advice for people? Don’t watch the news, don’t listen to the news? Listen to it but—

Dominick: No, listen to it but keep at the back of your mind what your objectives are you.

Karen: Right.

Dominick: I would be willing to say the half of the average person who comes to us does not have any objective in their mind whatsoever they come to us. Well you know we have a five page document and what’s called a recent policy statement but we go through a questions to determine what it is they want and most importantly what they don’t want.

Karen: Right.

Dominick: We put in front of the average person that they just sit there and can answer most of the questions. Well I have to take this home because I’d never thought it about before.

Jonathan: Yeah people don’t think about risk policy. I think about preserving their money, their assets and then taking money.

Dominick: Right. So I would just say this environment if you have goals r-evaluate them and if you don’t get yourself a set of goals for the end game.

Jonathan: What is it part of your job—your part of your job then is to help them find what their roles are.

Karen: Absolutely. We were talking about the client’s expectations. We put that expectation down there. Listen you’re not going to manage to the short term every month, everyday, every hour. It’s a long term process and a long term goal that’s what we’re going after. So we set the expectation as well as you know what the client expectations are.

Jonathan: What do you think the out look is you know for the next ten years as you—

Dominick: I look for—

Jonathan: For the market. You know—

Dominick: We don’t go up beyond 18 months. Here go manage the end game. Someone 10 years out, I would say this historically since World War II stocks were up around they living in a half percent on average on annual basis. Now history can be no guarantee of what’s going to go on to the future but I think it would be a fairly accurate statement to say that overtime stocks should out performed fix income investment such as bonds.

Jonathan: Right. You know you talk about stocks and I think about the country and I think about, you know I’m a speech right of the next person but I think about the crisis that we’re going through now and the guess prices and what you’re seeing on housing you know it seems like this guys is falling and I’ve heard people talking in that sense but when I looked back in history, you look it back to the people who survive the depression. Now the country made it to the depression of World War I or World War II, in Vietnam and in this all crisis you know you can go through history and guess what the country still standing. If there was to which period of strength and inspires down.

Dominick: And if you look all those periods the stock market was down. Generally anyway between 12 to 24 months after all those period you just mentioned the mark was dramatically higher.

Karen: Dominick let me ask your opinion, what do you think between equity indexes or just hand picking equities to themselves?

Dominick: That really depends on the person, the type of portfolio you’re going to build. Generally you know Karen mentioning baskets that you could actually go out now and buy indexes and that’s more what we call passive investing.

Jonathan: Yeah to get depends on the person and the what—

Dominick: Depends on the person and the objectives.

Jonathan: Did it more and so far herself incapable hands and hope that you know entrust to make the right decision with them or for them or help them make the right decision.

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