Corner Stone Wealth's online newsletter for September 2017
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September 2017
As I thought about what I valued most, I developed a certain philosophy toward life, something that became what I call the ‘Pillars of Life.’ These six pillars include spirituality, family, health, career, philanthropy, and finances.
The Pillars of Life The Foundation of Something Greater
Not long after my son, Jacob, was born, I found myself giving a lot of consideration to what I valued most in life. A few months after his birth, he was diagnosed with a heart defect: patent ductus arteriosus, or PDA. It was a condition that left him open to illness, if not treated. When Jacob was 9 months old, he had major heart surgery. Thankfully, Jacob came out of the surgery as well as I could have hoped. He was alive, and after a period of recovery, he would be well and able to live a life that any child — and any parent — could be proud of. Now, Jacob is 21 years old and recently out of the Army. He still has so much to look forward to, and I’ve the opportunity to watch him grow up and become the person he is today. From the day he was diagnosed to the day he went into surgery to his days spent recovering — all of this played a crucial role in the formation of Cornerstone Wealth Management Group. As I thought about what I valued most, I developed a certain philosophy toward life, something that became
what I call the “Pillars of Life.” These six pillars include spirituality, family, health, career, philanthropy, and finances. My personal mission is to live a balanced and fulfilled life, and it’s something I’m driven to help our clients achieve, as well. Cornerstone Wealth, for instance, was born out of the financial pillar. I want to serve as a cornerstone for our clients to allow them to focus on what is most important in their lives, all while doing the right thing for them to the greatest fiduciary standard. Each morning, I meditate on the six Pillars of Life. I visualize them and focus on what I want to get out of the day. I also contemplate what I need to do to maintain the balance between each pillar. When I concentrate on the pillar of career, I ask myself how I can deliver on my promise to help our clients live a balanced and fulfilled life of their own. How can I make the client experience better? The client experience is everything for the people who have come to rely on us. I want their experience to be the best possible experience they can have as investors. Whether it’s the service
or the strategies we provide, I want each client to leave our office or hang up the phone knowing that they’re in good hands and that they have a consumer advocate in the financial realm. When I wake up tomorrow morning, I’ll do as I’ve done for years. I’ll consider what it is in life that I value most, and I’ll carry it through the day as I work with colleagues, clients, and others, and as I work to help them achieve something greater.
– Scott Ford
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Dealing with Stress Learn Healthy Coping Mechanisms That Put You in Control
IDENTIFY SOURCES Chronic stress is hard to recognize. Look closely at your habits and excuses. Do you explain away stress as temporary? Do you define stress as an integral part of your life? Do you blame your stress on others? If you don’t recognize your role in creating or maintaining stress, you will never be able to control it. FIND HEALTHY STRATEGIES Withdrawing from loved ones, bingeing on food or alcohol, procrastinating, and sleeping too much are all unhealthy ways to deal with stress. Instead, find unique, healthy coping strategies. Focus on what makes you feel calm and in control. AVOID, ALTER, ADAPT, AND ACCEPT Some stressors are predictable. Learn how to predetermine your reactions by choosing to avoid, alter, adapt, or accept. Avoid people or situations that stress you out. Talk about your feelings instead of bottling them up, create a balanced schedule, reframe your problems, look at the big picture, and practice gratitude. It’s
critical to look at the glass as half-full and learn to forgive.
the fixed income component, and the real assets that make up the real asset component are selected for your portfolio. Implementation. Once asset allocation and investment selection decisions are made, they must be executed through the purchase and sale of assets or securities, resulting in your investment portfolio. Portfolio Monitoring and Evaluation. Over time, it’s essential to monitor both your own financial situation as well as the management of your portfolio. Any changes in your objectives, risk tolerance, income, net worth, or liquidity needs, or life changes like marriage or divorce, the birth of a child, or the death of a spouse, will require your investment plan to be updated accordingly. MAKE TIME FOR RELAXATION Nurturing yourself is a necessity, not a luxury. If you make ample time for self-care, you will be in a better place to handle life’s stressors. Give yourself options like going for a walk, calling a good friend, journaling, or reading a book. LIVE A HEALTHY LIFESTYLE In addition to regular exercise, there are other healthy lifestyle choices that can increase your resistance to stress. Eat a healthy diet; reduce caffeine and sugar; avoid alcohol, cigarettes, and drugs; and get enough sleep. Stress is unavoidable, but it doesn’t have to dictate your life. With stress management techniques, you can avoid chronic stress, reduce your stress levels, and live your life to the fullest. •
Y ou have more control over stress than you think. Stress management is about taking charge of your lifestyle, thoughts, emotions, and the way you deal with problems. No matter how stressful your life seems, there are steps you can take to regain control.
AMatter of Process The 4 Steps of the Investment Process
Goal Setting. The investment process begins with understanding and establishing clear financial goals. If you’re working with a wealth advisor, they can help you identify and prioritize objectives. The more detail you provide about current financial status, objectives, lifestyle goals, timeframe, and tolerance for risk, the more effective your wealth advisor will be in developing an investment plan and process tailored to address your needs. Portfolio Construction. This is divided into two primary parts: asset allocation and investment selection. Your wealth advisor works with you to develop a framework for managing your assets. You will be provided an opportunity
to review and approve all investment recommendations before your investment plan is implemented. Asset Allocation determines how investment assets are allocated across the different investment classes, such as equities, fixed income securities, cash or money market instruments, and real assets (such as real estate, commodities, and other assets). Asset allocation decisions are also framed in terms of investments in domestic securities versus global or international assets. Investment selection is the step where the stocks that make up the equity component, the bonds that make up •
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the period, but to weather the market’s worst days.
Trying to time the markets to avoid the worst days typically results in investors missing the market’s best days. That’s because, by the time investors re-enter the markets, an upward trend has already been established, resulting in investors paying higher prices for securities as their values rise. Look at what potentially happens if you remain in the market, weathering its ups and downs. As the graph indicates, if investors remained fully invested in the S&P 500 from January 1995 through December 2014, they would have realized a 9.85 percent annualized return (not including fees and expenses). But if, due to trading or sitting on the sidelines, they missed the 10 best days during that same period, those annualized returns would collapse to 6.1 percent. Keep in mind that achieving those returns required our hypothetical investors to not carsoninstitutional.com Carson I stitutional Alliance 13321 California Street Dodge Plaza, First Floor Omaha, NE 68154 toll free 888.321.0808 fax 402.330.1668 illustrate this point, we’ve tackled several common investment myths and realities. Myth and Reality The Truth About Market Timing
Returns of S&P 500 Hypothetical growth of a $10,000 investment between Jan 3, 1995 and Dec 31, 2014
$70,000
Source: Business Insider, March 12, 2015
$65,453 (9.85% return)
$60,000
Six of the ten best days occurred within two weeks of the ten worst days
$50,000
$40,000
$30,000
$32,665 (6.10% return)
$20,000
$20,354 (3.62% return)
$6,392 (-2.21% return)
$13,446 (1.49% return)
$4,570 (-3.84% return)
$10,000
Missed 40 Best Days $9,140 (-0.45% return)
0
Fully Invested
Missed 10 Best Days
Missed 20 Best Days
Missed 30 Best Days
Missed 50 Best Days
Missed 60 Best Days
Now look at what happens if the same investors missed the 40, 50 or 60 best days in the market; annualized returns for the period fell to -0.45%, -2.21% and -3.84% respectively. The reason missing the market’ best days can do so uch damage is becaus gai s are not able to compound ov r the holding period. So an attempt to avoid the market’s worst days not only leads to potentially missing the market’s best days, but losing out on the power of compounded earnings over time, which help fuel future investment growth. Indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. Past performance is no guarantee of future results.
only remain invested to enjoy the market’s best during the period, but to weather the market’s worst days. Now, look at what happens if the same investors missed the best 40, 50, or 60 days in the market. Annualized returns for the period fell to -0.45 percent, -2.21 percent, and -3.84 percent, respectively.
The reason why missing the market’s best days can do so much damage is because gains are not able to compound over the holding period. An attempt to avoid the market’s worst days not only leads to potentially missing the market’s best days, but losing out on the power of compounded earnings over time, which help fuel future investment growth.
Investment advisory services offered through CWM, LLC a Registered Investment Advisor.
ONE - PAN Harvest Pasta 2 tablespoons vegetable oil 1 small eggplant, cut into 1-inch pieces (4 cups) 1 medium zucchini, coarsely chopped (2 cups) 2 tomatoes or 4 Roma tomatoes, coarsely chopped (1 cup) 1/3 cup chopped red onion 1 (19-ounce) can cannellini beans (white kidney beans), rinsed and drained 2 cloves garlic, minced
Sudoku
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1 3/4 cups reduced-sodium chicken broth 1 cup dried whole grain elbow macaroni 1/2 teaspoon crushed red pepper Ground black pepper (optional) Snipped fresh basil Grated Parmesan cheese Kosher salt
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Instructions 1. In a very large skillet, heat oil over medium heat. Add eggplant, zucchini, tomatoes, red onion, and garlic. Cook, uncovered, 7–10 minutes or until vegetables are almost tender, stirring occasionally. 2. Add beans, broth, pasta, and crushed red pepper. Bring to a boil, then reduce heat. Cover and simmer 7–10 minutes more or until vegetables and pasta are tender, stirring occasionally. Remove from heat. Season with salt and pepper; top with basil and Parmesan cheese and serve. Recipe courtesy of midwestliving.com.
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INSIDE • The Pillars of Life PAGE 1
• Dealing with Stress PAGE 2
• The 4 Steps of the
Investment Process PAGE 2
• Are You Making These Assumptions? PAGE 3
• One-Pan Harvest Pasta PAGE 3
• The Museum of What? PAGE 4
The Museum of What? The World’s Strangest Museums
Everyone knows the Louvre and the Smithsonian, but you might be surprised to learn about some of the stranger museums around the world. For nearly every passion, there is a building somewhere dedicated to it. Take a look at some of the weirdest.
The Museum of Bad Art Dedham, Massachusetts
staplefromJapantoJamaica.Inadditiontoviewing someofthewilderexamplesfromaroundtheworld, youcanevendesignyourownpackaging.Bringalong somechopsticks,asthereareplentyofsamplesto slurp up.
There are plenty of museums dedicated to exceptional artwork from history, but only one dedicated to less successful artistic endeavors. The Museum of Bad Art, or MOBA, promotes itself as the home of “art too bad to be ignored.” A trip to MOBA will leave you smiling, laughing, and feeling a little better about the fact that you’re not Picasso.
The Kansas Barbed Wire Museum Rush County, Kansas
Sulabh International Museum of Toilets Delhi, India
Plenty of museums are hands-off, but that’s usually to protect the precious objects held within. At the Kansas Barbed Wire Museum, not touching the exhibits is just sound advice. The development of barbed wire was instrumental in settling the American West, and this museum pays tribute to its invention and evolution.
A functioning toilet is something everyone takes for granted until they don’t have access to one. In India’s capital, you can explore the fascinating history of commodes. Divided into three sections — ancient, medieval, and modern — you’ll be shocked at how much you can learn about history and culture through an examination of the ways a society flushes (or doesn’t).
Momofuku Ando Instant Ramen Museum Osaka, Japan
It’snotjustcollegestudentswholoveramen.Since theinventionoftheinstantnoodlesbyMomofuku Andoin1958,ramenhasevolvedintoabeloved
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