WEALTH MANAGEMENT & ACCUMULATION
WEALTH MANAGEMENT & ACCUMULATIONPresented by: H. Swint Friday, Ph.D., CFP.
1I. PRIORITY 1:UNDERSTANDING THE RISK
NASDAQ Composite Index History
NASDAQ Composite Index History
Japan Nikkei 225 Index
House-Price Indicators (1990-2010)
U.S. Housing Bubble
The Only Constant is Change!The Graham & Dodd P/E for the S&P 500
Measuring Risk Probability of Loss
Distributions Give Probabilities of Loss
The Type of Distribution Impacts Risk
Modern Portfolio Theory
DAX Index
Portfolio Diversification
Expected Return and Risk
Beware Misleading Data
1st Factor: Earnings Are King
P/E ratio measures price paid for $1 in earnings.Dow and DAX P/E Ratios
2nd Factor OIL: Life Blood of Global Economy
Every product has substantial energy component to its cost
Leverage effect:Sale price: $20 $20COGS: $15 $18 (20% increase)Profits: $5 $2 (60% decrease)
3RD Factor: Taxes
Warren Buffett Quote:
Simple Truth:Soccer BallArt PaintCreating Wealth MoneyWealth Redistribution
Every player on team gets chance to shoot for the goalMessi must wait his turn.Not fair that he gets all the glory.
4TH Factor: Housing
5TH Factor : Fed Policies
THE RICH ARE RICHER
The rich are getting richer. All is going to richest of the rich.52
Why Are Richest of Rich Getting So Rich?1.Their Investment Choices:
Business OwnershipReal EstateStocks and Bonds
2.They take risks other dont56THANK YOU !
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