Road to Independence

I finished my investment policy statement (IPS) template this week. I have the standard language along with a portion which is customizable. Now that it is ready to launch, I am faced with a challenge because an IPS requires you to maintain certain allocation ranges. So, if you want to venture out beyond these ranges, you would have to revise your IPS. Today I’d like to venture outside these boundaries, namely increasing exposure to alternative investments. This is because no matter how the stock market is performing, there is always money to be made somewhere. Currently there are opportunities in commodities, shorting financial stocks, currencies, and of course CDs to name a few.

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Over the past month I’ve received a number of e-mails from readers asking the same question, “Would you mind sharing your “What’s Important to You” document. While I don’t mind sharing it, my version would be different from yours. This document, which I use with prospective clients, helps me to understand their needs as it relates to my practice. In other words, will they benefit from the things I am doing? Because of your interest, I’ve decided to provide information which will enable you to create this type of document for your specific practice.

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Does demand drive innovation or does innovation create demand? Or is it possible that both are true? When I look at the landscape in our industry I see consumers looking for objectivity. They desire someone who will really and truly look out for their interests.

There are certain things that have a broad appeal to the consumer. For example, we’re all going to die some day, and because of this universal fact, the life insurance industry has created a way to provide for the survivors. When a life insurance salesman calls on a prospect, they can offer something that the customer needs. How much and what type of insurance, plus which company, are questions that need to be addressed. But what if the agent is a representative of just one company? What then? Is the customer really getting the very best product for their situation?
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What a week! I had several appointments that were very productive. I was also working feverishly to tie up some loose ends before I set off for Boston next week (No, I’m not going to a Celtics game. They beat my Pistons!). I have been asked to speak to a group of advisors and some company executives on “Using Monte Carlo Simulation in a Financial Planning Context.” The company, Oracle, has a product called Crystal Ball which I’ve been using for 10+ years now. I will demonstrate how I use it in financial planning. There will be another person speaking on using Crystal Ball in portfolio management. Afterwards, I will travel up to New England to visit with a client, take some time to relax, hike, and visit some old friends.

I have been writing a monthly newsletter and e-mailing it to clients and others for about 6 months now. The responses I’ve received have been great, which encourages me to continue. Today I sent out a separate, periodic report and will continue to do so whenever the situation warrants.
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