Cornerstone Wealth's online newsletter for October 2017
www.CornerstoneWealthGroup.com | 866-485-8505
October 2017
There were so many lessons that came out of the dot- com bubble — lessons that have stayed with me. However, while you can’t control what happens in the market, you can manage your own situation and put measures in place to protect your financial future. In short, that’s where I come in to the picture. While I’m a wealth advisor by day, I maintain an active lifestyle on evenings and weekends. I used to play a lot of tennis, though I ended up hurting my back last year, which put a damper on one of my favorite activities. But that hasn’t slowed me down by much. My two kids, Ian, who’s 15, and Lauren, 11, keep me moving. My son, who’s autistic, loves horseback riding and often rides at Star Community’s Equestrian Center. Star Community is an organization dedicated to special needs children and an organization I am proud to serve as Treasurer. My daughter is into both soccer and tennis. In fact, Lauren was recently recruited by the Washington Spirit U.S. Soccer Development Academy! I want to end by saying my wife, Stacey, and I just celebrated our 20th wedding anniversary. Stacey teaches fourth grade, and she is an all-around amazing woman. It’s been an incredible 20 years!
18 YEARSWITH CORNERSTONEWEALTH
Scott Toms and the Changing Financial World
I joined Cornerstone Wealth Management in March of 2000. While that’s a fairly innocuous fact about me, if you remember that year, you know what was about to happen. I started my advisory career at an interesting time. We were months away from shifting into a bear market, and the dot-com bubble was about to burst. You could say I held on to my seat and weathered the storm. Investors were nervous and emotions ran high. Before the bubble burst, I hadn’t experienced anything like that in terms of sheer uncertainty. As I joined the financial industry, my first year gave me an incredible look at how things really worked in the investment world. No amount of formal education could have prepared me for the early 2000s. It was something you had to experience. It came with its own learning curve and, as you can imagine, there were major challenges to overcome. Despite the emotions and the anxiety shared by investors, I wouldn’t change my experience (though I’m sure the many people who invested in the countless dot-coms of the time might disagree). These experiences set the stage for my career to come. There were so many lessons that came out of the dot-com bubble — lessons that have stayed with me.
One of the aspects of the financial industry that keeps me engaged after 18 years in the business — and one of the aspects that I truly love — is that everything is constantly changing. It’s an environment in which there is always new information to absorb. After all, the financial world never sleeps. New businesses come into the fold, and there are always new investors, new strategies for investment, and so on. More importantly, though, I love working with clients. Because the financial industry is constantly changing and nuanced, our clients (and really anyone looking for wealth management solutions) may not be well-versed in available investment options or wealth planning in general. To have the opportunity to sit down and talk about wealth planning, and to help clients pursue their goals, is highly rewarding and a huge source of pride. Of course, it isn’t without its set of challenges. Coming back to my earliest days as an advisor, I do have to remind clients that there is a lack of control when it comes to investing. The stock market is largely unpredictable, and as investments fluctuate day-to-day and week-to-week, it can be easy for even seasoned investors to forget. Forgetting can lead to an emotional response, and emotions don’t tend to mix well with the financial markets.
– Scott Toms
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USE DIFFUSERS TO REAP THE BENEFITS OF ESSENTIAL OILS
aromatic compounds are strong and can cause irritation. As a result of these concerns, many essential oil acolytes have turned to diffusers to get the benefits of aromatherapy in a safe, wonderful-smelling manner. In addition to filling your house with an all- natural, appealing perfume, aromatherapy has been touted as a way to help with everything from stress and insomnia to cognitive function and mood enhancement. To receive these benefits, you’ll need to pick up a diffuser and some oils. With so many options, though, how do you know which one is right for you? There is no shortage of methods for diffusing essential oils. Nebulizing diffusers don’t require any heat source, instead atomizing the essential oils. They are extremely effective, but they are also large and expensive. Ultrasonic diffusers are similarly heatless, preserving the oils. This type of diffuser can also work as a humidifier, making it a valuable multitasker. Heat and
all of which the portfolio manager believes will produce better results than a fully diversified portfolio. Concentration also carries higher risk. Buy-Sell Discipline This is a method of investing that removes the emotional aspect of decision-making. Instead, it relies on rigorous research, as well as qualitative and quantitative screening methods. When an investment does not meet parameters defined by the portfolio manager, it is sold to make room for a new investment that does. Some IRA’s have contribution limitations and tax consequences for early withdrawals. For complete details, consult your tax advisor or attorney. Distributions from traditional IRA’s and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59 ½, may be subject to an additional 10% IRS tax penalty. evaporative diffusers are cheaper options, but they tend to alter oils or separate particles according to size. Once you decide on the best diffuser for your home, you need to select a few essential oils and put your new toy to use. Lemon oil is antibacterial and antiseptic, and it will freshen your environment. Cinnamon oil can clear congestion and has a homey, autumnal scent. Eucalyptus oil is an air purifier, but its scent is strong and not for everybody. If you want to de-stress, try rosemary oil, which decreases your cortisol levels. Take note that you should alert your doctor before partaking in aromatherapy if you’re pregnant, nursing, or on any medication. While most essential oils are perfectly safe to diffuse, the compounds in certain oils can combine with medication and trigger adverse side effects. Once you begin diffusing, you’ll never go back to commercial, chemical scent sprays. The benefits are evident, and the results smell sweet.
I f you’ve stopped by a health store recently, you’ve no doubt seen a huge selection of essential oils. These liquids, which contain concentrated, natural aroma compounds found in plants, are the basis of aromatherapy, one of the most popular trends in holistic health. Aromatherapy involves applying these oils to the skin or spraying them into the air. Skin application requires that you use diluted oils, because
Types of Investment Strategies A Closer Look at the Investment Process
Investment managers and wealth management firms employ varied
Technical Analysis Examines how security prices behave over time. This data is used to control profits and minimize losses, with a focus on continual trading (as opposed to buying and holding).
investment strategies and techniques for their clients’ portfolios. These are techniques derived from the wealth managers’ investment philosophies, objectives, experiences, and beliefs. They know what has worked for them, and in turn, apply it to the way they do business. Here are a few examples of those techniques: Active Portfolio Management Your investment manager selects individual investments (stocks, bonds, etc.) to create a portfolio. Passive Investment Management This style is employed by many index funds and certain ETFs which track selected indexes (i.e. the S&P 500) or companies.
Fundamental Analysis Examines quantitative aspects of
companies selected for investment. These aspects can include industry and sector, profit margins, balance sheet, business model, growth potential, company management, public relations, and outside political influences, issues, and legislation that may impact the company. Concentration vs. Diversification Diversification spreads investment assets across multiple investments or investment classes to reduce risk. Concentration maintains investing in one investment idea or a narrower basket of investments,
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GETTING THE MOST OUT OF YOUR FINANCIAL ADVISOR Highlights From Wealth From Wisdom Radio
Setting the Record Straight on 7 Toxic Investing Myths
getting the picture — you’re just getting a piece of the overall puzzle.
Ron draws a comparison to online retail giant Amazon. This is a company that tells you exactly what they’re going to charge you and what you can expect as a result of your payment, from the product to shipping to shipping times. Amazon turns something that was once complex into something simple. They leverage the best technology to deliver the greatest client experience for the lowest cost. Plus, they continue to evolve. Can you say the same of your advisor? Do they make your life easier and work to build trust? If they don’t, that’s a major red flag. But, it’s far from the only red flag. For more, be sure to check out the podcast at wealthfromwisdomradio.com.
In this month’s Highlights From Wealth From Wisdom Radio, Ron Carson and co-host Paul West take on investing myths and getting more out of your financial advisor. In this podcast, dated June 10, 2017, find out what you can do to have a happy and healthy professional relationship with the person advising you on your money. Here are few highlights. Essentially, people fall into one of two camps. Either you don’t have a financial advisor because you don’t know who to turn to or who to trust, or you do have a financial advisor, but you’re not 100 percent convinced they’re creating any value for you. You’re concerned you’re not
Hiring a financial advisor is one of the most important decisions you’re ever going to make. If you have an advisor and they aren’t creating value, it could cost you in more ways than you realize. Conversely, if you are working with a qualified, competent professional who’s truly in your corner, you know. They bring value in so many tangible ways. You can see the return in terms of both financial and relationship value. But how do you know you really have the right advisor? There are warning signs to look out for, like fee transparency. This is huge. Does your advisor break down all the fees and what they can do for you?
Sudoku
SAUSAGE AND BARLEY SOUP
It’s a great time of year to warm up with a cup of soup, and this comforting, guilt-free dish comes together in a flash.
INGREDIENTS •
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1 (14½-ounce) can Italian- style stewed tomatoes, undrained and chopped ¼ cup uncooked quick- cooking barley 1 cup coarsely chopped fresh baby spinach
Cooking spray
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6 ounces turkey breakfast sausage 2½ cups frozen bell pepper stir-fry
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2 cups water
INSTRUCTIONS 1. Heat a large saucepan over medium-high heat. Coat pan with cooking spray. Add sausage; cook 3 minutes or until browned. Remove from heat. 2. While sausage cooks, place stir-fry and 2 cups water in a blender; process until smooth. 3. Add stir-fry puree, tomatoes, and barley to sausage in pan. Bring mixture to a boil over high heat; cover, reduce heat to low, and simmer 10 minutes. Stir in spinach; cook 1 minute or until spinach wilts.
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Recipe courtesy of CookingLight.com.
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INSIDE
• Scott Toms and the Changing Financial World PAGE 1
• The Benefits of Essential Oils PAGE 2
• Types of Investment Strategies PAGE 2 • Getting the Most Out of Your Financial Advisor PAGE 3
• Sausage and Barley Soup PAGE 3
• The Acropolis of Athens: Tips for Your Trip Back in Time PAGE 4
THE ACROPOLIS OF ATHENS Tips for Your Trip Back in Time
When people think of a vacation to Greece, the first images that come to mind are often the picturesque beaches of Mykonos Island or plates of delicately layered moussaka. But no trip to the cradle of Western civilization would be complete without a visit to one of the most incredible historical sites in the world: the ancient Acropolis of Athens Around 468 B.C., while Athens was enjoying its status as the greatest cultural hub of the era, Pericles initiated a robust reconstruction of the Acropolis. Almost half of the population was on the public payroll during the project, generating what would become many of the most
memorable structures in history, including the famous Parthenon. Today, the ruins of the Acropolis still stand, a testament to the ingenuity of one of the most advanced civilizations of the classical age. If you plan on exploring the breathtaking ruins and the Acropolis Museum, which houses over 4,000 artifacts from the site, it’s a good idea to avoid the Mediterranean cruise hordes and get there early, as close to 8 a.m. as possible. A four-day pass to peruse the Parthenon, the temples of Athena and Zeus, and many other world-famous sites costs around 12 euros, but keep in mind you
can visit each site only once per pass. Due to the scorching heat that hits the area in the summer, you may want to visit during late winter or early spring. To absorb the incredible history of this ancient monument, it’s a good idea to either pay for the audio guide as you enter or go to the “Watch, Read, Listen” section of ricksteves.com and download his audio guide for free. You can also get a full tour from a local guide. Head to toursbylocals.com/Athens-Tours to find the perfect guide for your trip.
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