Reasons to Consider a New Financial/Investment Advisor

Has your portfolio suffered significantly in 2000 through 2002? Our Seasonal Investment Approach seeks to reduce our clients' equity investments in seasonally weak periods and increase equity investments during strong seasonal periods. Ask how the Seasonal Approach had a positive return in stocks in the three years 2000-2002, rather than losing money.

Are you disappointed in your investment returns? Have your stock and mutual fund portfolios matched the returns of the S&P 500? The S&P 500 earned nearly 19% in the five years ending December 2000.* Studies have shown that most individual investors earned far less than the market averages during that time. Many lost more than the cumulative losses of the S&P 500 of 40% over 2000-02.

Do you have an investment discipline that will guide you through future bull and bear markets? We expect that we are back in a period of normal bear markets which occur every 4 to 5 years and average a -30% decline. We expect that bull markets will average positive returns of 100% to 150% and will last around 4 years. In addition, there are weak and strong seasonal patterns that occur each year. You can allow these patterns to hurt your portfolio or you can position your portfolio to potentially benefit from these patterns. We try to help clients take advantage of these patterns.

Have you changed your investment strategy in light of the potential for rising interest rates? Many people have used a basic buy and hold investment approach. Buy and hold investing was popular and a potentially effective investment approach in the 1980's and 1990's when interest rates were falling. With interest rates poised to rise in the future, the keys to investing have changed, and buy and hold investing is likely to lead to unacceptable returns. In order to realize their desired returns, investors may have to use a different, more active investment strategy than they have used in the past.

Do you have a plan to more than quadruple your retirement income during retirement? If you expect to live 25 to 30 years in retirement and inflation averages 4 or 5%, then you will need to triple or quadruple your income over your retirement lifetime.

Are your assets positioned to take advantage of a stock market that may grow from a DOW 30 level of 8,500 now to a DOW 22,000 in 10 years or a DOW 57,000 in 20 years? Those stock levels represent 10% compounded growth – slightly less than the average returns of large U.S. stocks over 76 years.*

Would you like to know whether you can retire on your expected retirement date and live a long and comfortable retirement? Would you like a framework for investing and living in retirement? Most people have never received a professional retirement plan to see if they can retire comfortably when they want to retire. Preparing one doesn't have to take a lot of your time, and it can give you great comfort. If the plan shows that you can't retire on your schedule, an advisor can tell you what to do differently to improve your situation.

Some of the best investment managers have high account minimums up to $5 or $10 million or more. Are you interested in an approach that would enable you to use their services?

If you die tomorrow, are your heirs in a position to manage your investments and handle your complex financial and estate matters? These are difficult issues even for people experienced with investments and financial matters. Certain advisors will step in and help your family during such times.

Would you be interested in a single investment advisor that can help you coordinate your stocks, bonds, mutual funds, IRAs, 401k, 403b accounts, stock option exercising and other investments, and also help advise on estate planning, college funding, refinancing your home, leasing or buying your car, or whether to obtain long term care insurance or increase or decrease your life insurance? Most brokers and investment advisors cannot or will not help investors coordinate and manage all their investments and also independently advise on insurance and other financial matters.

Are you unhappy with the lack of personalized attention and service of your advisor or broker? Are you comfortable that he or she is looking out for your best interest, or are you concerned the broker is motivated by his or her compensation? If you don't trust, or are uncomfortable with, your investment advisor, you should consider your alternatives.

What portion of your portfolio is destined to lose money over time when you consider the impact of inflation and taxes on those returns? Certain kinds of investments have historically earned negative returns when inflation and taxes are considered. You should know about better alternatives.

What risks are the most important for you to consider in investing – the risks of the stock market or the risks of outliving your assets? While the risks of stocks and bonds are important, most investors should be focused on the risks of outliving their assets and invest accordingly.

In the next 40 years, you are likely to experience 8 to 10 stock bear markets as well as the potential for 8 to 10 bull markets. Is your portfolio and are your emotions prepared for this probability? What, if any, changes should you make to your investments?

The traditional approach to diversifying against stock market risk is often ineffective? Are you relying on that approach to diversification, or are you using multiple approaches? There are four basic ways to help diversify, and you can use all four of them.

Do you have an effective strategy for exercising your company's stock options? Your existing options may represent your greatest opportunity to create wealth in your lifetime. The prices of many stocks vary nearly 50% to 100% each year. Would you benefit from a professional, second opinion on when to exercise and sell those options?

Do you have too much invested in your company's stock when you combine direct family ownership, unrealized stock option gains and stock in the stock savings plan or 401k? These are tough decisions that sometimes require dispassionate, independent advice. If you do have too much, which investments should you sell first?

Before you sell your company's stock in your stock savings plan or 401k, you should consult a good advisor. You may lose significant tax advantages. This is an issue unknown to many employees and advisors.

What estate planning approaches should you consider under the new tax laws passed in 2001? After review and discussion, do you need a recommendation for an estate-planning attorney? Or a CPA to help with your taxes? A good advisor has these contacts.

Do you have a plan to pay for the college education of your children or grandchildren? With the new college funding plans and the expected high cost of college, you need to begin funding for college early. You should re-evaluate UGMA accounts and parental "college investment" accounts. Many probably should be closed out.

Are you too busy with your career or doing things that you enjoy to deal with today's complex financial issues? Or, are you not experienced enough to deal with these issues? There are advisors who can help you deal with these important issues in a rather easy and direct manner…. and without a lot of work on your part.

Are you satisfied with your answers to these questions? There are very, very few advisors in Southeastern Michigan that can help you deal with all of these questions. We offer one-stop financial advice for clients. If you would you like to learn more about these issues without an obligation to commit yourself to an on-going relationship, then call Pattern Recognition Management (734-996-5912) to talk to or set up an appointment with Larry.

Larry believes the selection of a financial advisor is of critical importance. It should be made carefully and with as much information as possible. He has prepared an audiocassette that will give you insight into his philosophy, experience and methods of working with clients. You can play that audiocassette in your home or car.

He is interested in long-term relationships that are mutually beneficial and built on the highest levels of integrity, trust and service. If this kind of relationship appeals to you, he would be happy to sit down with you to discuss your financial needs and goals. There is no cost or obligation for the initial meeting. At that time, you can also see why his clients are so pleased with the investment services and financial advice that he provides.

* The S&P 500 is made up of 500 common stocks representing major U.S. industry sectors, and the Dow 30 is made up of 30 large company stocks. All indices are unmanaged, and one cannot invest directly in any index. Past performance does not indicate future performance. Source: Ibottson & Barrons

Securities offered through Mutual Service Corporation, Member NASD/SIPC. Investment advisory services offered through Pattern Recognition Management, Inc., a registered investment advisor.