Investment Outllook 2014

1Investment Outlook 2014

Investment Outlook

A Live Webcast Hosted by:

GV Financial Advisors

Presenters: David Geller, CEO and

Aradhana Kejriwal, Senior Portfolio Manager

January 23, 2014


Webinar Agenda• 2013: The Year in Review• Current Environment• Current Market• Meet Our Hypothetical Investors

• Karen and Patrick

• Where Should I Invest?


THE YEAR 2013…

Investment Outlook 2014

FEARS in 2013

Failure of Washington

Declines in geopolitical environment

Substantial financial commitments incurred by governments

Significant decline in economic activity – a recession

Government Commitments

Economic Activity

Geopolitical Risk

Washington


What happened in 2013?

Bond Market Stock Market• All-time high for S&P 500• Best Yearly Return since 1999• Dow up 30% with best yearly

return since 1995

• Barclays Aggregate down 2.1%• 3rd worst annual return since 1976• Worst return in 15 years

S&P 500 up 32%

Source: Morningstar Direct. Past performance does not guarantee future returns


Forecast Follies…

Past performance does not guarantee future returns


Where did the money go?

Source: Morningstar Direct



THE CURRENT ENVIRONMENT


Eye on…

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=qIeQa4RaO26G2M&tbnid=RkyMeIul1VuVyM:&ved=0CAUQjRw&url=http://www.frontpagemag.com/2013/thomas-sowell/prophets-and-losses/404683-the-facade-of-the-federal-reserve-bank/&ei=VvvWUoqbNuassAST2IHQCg&bvm=bv.59378465,d.eW0&psig=AFQjCNF1Z6FSJCU97Te-RE-KczmUvSm1cA&ust=1389907157409396




Eye on…

Geopolitics

Unem

ploy

men

t

Washington


Economic Summary

1 2 3

Five Words to Remember

Better Low Steep

4

Strong

5

Higher


THE CURRENT MARKET

Sell or Buy?


Market Due for a Correction?

Source: Fidelity InvestmentsPast performance does not guarantee future returns


What's Next?Years with S&P 500 performance greater than 25%

Year Price return Following year's return

1928 1933 1935 1936 1945 1954 1955 1958 1975 1980 1985 1989 1991 1995 1997 1998 2003 2013

38% 44% 41% 28% 31% 45% 26% 38% 32% 26% 26% 27% 26% 34% 31% 27% 26% 30%

-12% -5% 28% -39% -12% 26% 3% 8%

19% -10% 15% -7% 4%

20% 27% 20% 9% ?

Average 32% 6%Source: Strategas Research Partners LLC, as of December 31, 2013


What's next?1

98

0

19

81

19

82

19

83

19

84

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

26%

-10%

15%17%

1%

26%

15%

2%

12%

27%

-7%

26%

4%7%

-2%

34%

20%

31%27%

20%

-10%-13%

-23%

26%

9%

3%

14%

4%

-38%

23%

13%

0%

13%

30%

-17%-18%-14%

-7%

-13%

-8%-9%

-34%

-8% -8%

-20%

-6% -6%-5%

-9%

-3%

-8%-11%

-19%

-12%-17%

-30%-34%

-14%

-8%-7%-8%

-10%

-48%

-28%

-16%-19%

-10%

-5%

Intra-year Declines vs. Calendar Year Returns

In the last 33 years, market's returns were positive 81% of the time (27 years). Each year had intra- year declines ranging from -3% to -48%.

GVFA 2014 0001 DOFU 1/2014

Source: Standard and Poors 500, FRED Graphs and Nick Murray, "The Annual End of the World", Interactive, December 31, 2013. Returns based on price only and do not include dividends. Past performance does not guarantee future returns


Breaking Point

What is your breaking point?

-48%

-28%

+4%

All Bonds

All Stocks

50/50

+180%

+83%

+26%

What is your breaking point?



Cheap or Expensive?



Cheap or Expensive?

Price-to-Earnings Ratios (P/E Ratios)


• A Retired Couple in Their Early 70’s• Active in Their Community

Rhonda & Ralph’s Investment Portfolio

Total Value: $3.5 million

Allocation: Portfolio currently invested

in bonds for safety

Meet Karen and Patrick(a hypothetical couple)

• A Retired Couple in Their Early 70’s• Active in Their Community

Karen and Patrick’s Current Investment Portfolio

Total Value: $3.5 million

Allocation: Portfolio currently invested in bonds for safety


Stocks

2008 (37%)

2002 (22%)

2001 (11%)

2000 (9%)

Bonds

1994(2.92%)

2013 (2.02%)

1999 (0.82%)

19781.39%

Worst Stock and Bond Markets- last 3 decades

Source: Morningstar DirectPast performance does not guarantee future returns


Bonds Teeter-Totter

Bond Prices Fall

Reinvested Income

increases return

Source: GW&K Investment Management, Mellon, Federal Reserve. Disclosures: 1983 represents the first full year when data was available for all indexes listed here. Data represents a variety of high quality bond indexes by Barclays Capital. Past performance is no guarantee of future results. Fixed Income Investments are subject to interest, credit, and market risk. Interest rate risk: the value of fixed income investments will decline as interest rates rise. Credit risk: the possibility that the borrower may not be able to repay interest and principal. Low rated bonds generally have to pay higher rates to attract investors willing to take on greater risk. Market risk: the bond market in general could decline due to economic conditions, especially during periods of rising interest rates.


Manage Your Bonds

Keep an eye on…1. Seek active management2. Diversify your bonds3. Don’t chase yields4. Look for out-of-box solutions


An Income-Driven Portfolio

Diversified Bonds42%

Income Driven Equities

38%

Alternatives20%

Sample Portfolio for Karen and Patrick

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own situation before making any investment decisions. Consult a financial advisor.


Where should I Invest?


NOISE


Questions to Ask…

Portfolio Guided Wealth®

Are you diversified?

Do you have sufficient liquidity?

Do you have an “All-Weather” portfolio?

Is your portfolio strategy causing you anxiety?

Is your portfolio aligned with your Life Priorities?

Do you perceive your portfolio as your TOTAL wealth?


STAY THE COURSE


Q&ACONTACT US: 770-295-5600 OR AT [email protected] VISIT US ON THE WEB: WWW.GVFINANCIAL.COM

A REPLAY WILL BE AVAILABLE SHORTLY ON THE WEB

mailto:[email protected]

http://www.gvfinancial.com/

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DISCLOSURES:The opinions in the preceding commentary are as of the date of publication, are subject to change based on subsequent developments, and may not reflect the views of the firm as a whole. This material is not intended to be relied upon as a forecast, research, or investment advice regarding a particular investment or the markets in general. Nor is it intended to predict or depict performance of any investment. This document is prepared based on information GV Financial Advisors deems reliable; however, GV Financial Advisors does not warrant the accuracy and completeness of the information. Consult a financial advisor as to what investment strategy might be best for you. The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review and investment strategy for his or her own situation before making any investment decisions.Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities or other financial instrument or any derivative related to such securities or instruments (e.g., options, futures, warrants, and contracts for differences). This report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person. Investors should seek financial advice regarding the appropriateness of investing in financial instruments and implementing investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Any decision to purchase or subscribe for securities in any offering must be based solely on existing public information on such security or the information in the prospectus or other offering document issued in connection with such offering, and not on this report.All opinions, projections and estimates constitute the judgment of the author(s) as of the date of the report and are subject to change without notice. Prices also are subject to change without notice. GV Financial Advisors is under no obligation to update this report; readers should therefore assume that GV Financial Advisors will not update any fact, circumstance or opinion contained in this report.Neither GV Financial Advisors nor its affiliated companies nor any director, officer or employee of GV Financial Advisors or its affiliated companies accepts any liability whatsoever for any direct, indirect or consequential damages or losses arising from any use of this report or its contents.Examples and historical data contained herein are provided are for illustrative purposes only and not intended to be reflective of results you should expect to obtain. Past performance is no guarantee of future results.Different types of investments involve varying degrees of risk and there can be no assurance that any specific investment will either be suitable or profitable for a client’s investment portfolio. You should not assume that any information presented herein would be appropriate in the future. Some of the information is provided by Zephyr Associates in association with Morningstar, Inc.; while these and other sources cited herein are believed to be reliable and assumed to be correct, readers are cautioned that accuracy cannot be and is not guaranteed.More information is available by contacting Aradhana, CFA, Portfolio Manager, at GV Financial Advisors. She may be reached via email at [email protected] or by telephone at 770-295-5659.GV Financial Advisors is a Georgia corporation registered with the Securities and Exchange Commission as an Investment Advisor under the Investment Advisors Act of 1940.

GVFA 2014 0012DOFU 1/2014

mailto:[email protected]

Economy & Finance

Investment Outllook 2014