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Welcome John R Ruocco Asset Management Associates South Windsor, CT

Welcome John R Ruocco Asset Management Associates South Windsor, CT . Welcome to my world!. Situation. Attorney Trust Account Client. Variable Annuity. Steep redemption fee (commission) M&E of over 2% per year 1% advisory fee – deducted from account

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Welcome John R Ruocco Asset Management Associates South Windsor, CT

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  1. Welcome John R RuoccoAsset Management AssociatesSouth Windsor, CT

  2. Welcome to my world!

  3. Situation • Attorney • Trust Account • Client

  4. Variable Annuity • Steep redemption fee (commission) • M&E of over 2% per year • 1% advisory fee – deducted from account • Automatic trading system – multiple trades monthly • .75% advisory fee billed in addition to above. • Market in uptrend – account losing money (years)

  5. Common ElementAmong Clients • We share a general distrust of the investment industry.

  6. Evolution • A shares • B shares • C shares • Fee based “boilerplate plans” sell the abc’s • Wrap and managed accounts (many use etfs) • Very little has changed!

  7. History • Crash of October 1987 • Meltdown of Japan • Highest Mstar Rating in 1990 - high exposure to Japan • Junk Bond Meltdown – Milken - DBL • Savings and loan scandal • Real Estate Partnership Meltdown early 90’s • Colonial Realty ( S&L Crisis) • Oil – T. Boone Pickens • Tech – Dotcom Bust (ditto – morningstar) • 9-11 • Financial Meltdown of 2008, MM Freeze • Bernie Madoff and Mini Crash May of 2010

  8. Investment Background • General Sales Background • Learned rapidly, sales driven business. • Fee structure seemed very high • Investment advice - secondary

  9. My objective • Simple – straight forward way for average person to invest a clients money. • --- and get paid a reasonable fee to do it.

  10. Learned from History – 80’s Nobody Knows Anything!

  11. Early Years (1980’s) • Created portfolios using “No Load” funds for individual clients. • High liquidity • Low fees • Good performance • Good diversification ( minimal trading) • Fees about 1% or less • Way ahead of the crowd Note: Fidelity was the first to create multiple “sector funds”.

  12. ETF’s • Natural Transition Extension for: • Sector Exposure • Liquidity • Transparency • Easy to isolate risk (offset / balance risk) • Easy to create portfolios for clients combining funds and ETF’s

  13. I- Shares and others • Opens the door to many markets and sectors. • Bonds • Country specific, regional, Int’l

  14. ETF - Ideal for Client Profile • Business owners, professionals with 200k to 2 million or so in investable assets. Growing. • Small pensions, SEP’s, DB plans, IRA’s Trust accounts.

  15. Common Sense • People lose tons of money because they deviate from common sense • They look for high returns • viaticals

  16. Stick With Basics Mainstream Investments Highly Liquid Transparent: Easy to understand Solid Management (Reputable Management) As close to Vanilla as possible

  17. Avoid Losses • What is the Risk? • How can we lose money? • How much can we lose? • Can we offset the loss with something else?

  18. ETF Advantages • Transparent • Low cost of holding – low transaction fee via discount broker. • Very easy to purchase • Easy to isolate risk • Since Set of Homogeneous stocks • Very Liquid • Controls via stop and limits etc • Ideal as building blocks for a portfolio

  19. Favorites • Select sector “SPYDERS” • Bond ETF’s • Junk, Treasury – long/short duration • International • Broad – and country specific, Emerging Markets • Metals: Gold, silver, Commodities oil • Usually use large more liquid etfs….with mainstream underlying securities.

  20. Use ETF’s as Tools • Build portfolios • Easily adjust them • Penetrate many markets • Shorts, bonds, futures, commodities • Low cost, highly liquid portoflios.

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