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INVESTMENTS

INVESTMENTS. INVESTMENTS DECISIVE PATHS. PATHS. investment paths. CRITICAL INVESTMENT PATHS. investment paths. CRITICAL INVESTMENT PATHS. FOOD STORAGE. FOOD. investment paths. CRITICAL INVESTMENT PATHS. SPEND LESS. FOOD. SPEND. THAN INCOME. LESS. investment paths.

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INVESTMENTS

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  1. INVESTMENTS INVESTMENTS DECISIVE PATHS PATHS investment paths

  2. CRITICAL INVESTMENT PATHS investment paths

  3. CRITICAL INVESTMENT PATHS FOOD STORAGE FOOD investment paths

  4. CRITICAL INVESTMENT PATHS SPEND LESS FOOD SPEND THAN INCOME LESS investment paths

  5. CRITICAL INVESTMENT PATHS FOOD SPEND DIVERSIFICATION LESS DIVERSIFICATION investment paths

  6. CRITICAL INVESTMENT PATHS FOOD FOOD SPEND ALLOCATION DIVERSIFICATION LESS ALLOCATION investment paths

  7. CRITICAL INVESTMENT PATHS FOOD FOOD SPEND HISTORICAL PRICING MODELS DIVERSIFICATION LESS ALLOCATION HISTORICAL PRICING MODELS investment paths

  8. CRITICAL INVESTMENT PATHS FOOD SPEND MANAGE THE MANAGERS MANAGE THE MANAGERS DIVERSIFICATION LESS ALLOCATION HISTORICAL PRICING MODELS investment paths

  9. CRITICAL INVESTMENT PATHS FOOD SPEND MANAGE THE MANAGERS DIVERSIFICATION LESS INVEST MORE MONEY ALLOCATION HISTORICAL PRICING MODELS investment paths

  10. PRESIDENT B. YOUNG SALT LAKE CITY, JUNE 5, 1853 Journal of Discourses 1 Vol.: pg. 248 Were I to ask the question, how much wheat or anything else a man must have to justify him in letting it go to waste, it would be hard to answer; figures are inadequate to give the amount. Never let anything go to waste. Be prudent, save everything, and what you get more than you can take care of yourselves, ask your neighbors to help you. There are scores and hundreds of men in this house, if the question were asked them if they considered their grain a burden and a drudge to them, when they had plenty last year and the year before, that would answer in the affirmative, and were ready to part with it for next to nothing. How do they feel now, when their granaries are empty? If they had a few thousand bushels to spare now, would they not consider it a blessing? They would. Why? Because it would bring the gold and silver. But pause for a moment, and suppose you had millions of bushels to sell, and could sell it for twenty dollars per bushel, or for a million dollars per bushel, no matter what amount, so that you sell all your wheat, and transport it out of the country, and you are left with nothing more than a pile of gold, what good would it do you? You could not eat it, drink it, wear it, or carry it off where you could have something to eat. The time will come that gold will hold no comparison in value to a bushel of wheat. investment paths

  11. PRESIDENT B. YOUNG SALT LAKE CITY, JUNE 5, 1853 Journal of Discourses 1 Vol.: pg. 248 Gold is not to be compared with it in value. Why would it be precious to you now? Simply because you could get gold for it? Gold is good for nothing, only as men value it. It is no better than a piece of iron, a piece of limestone, or a piece of sandstone, and it is not half so good as the soil from which we raise our wheat, and other necessaries of life. The children of men love it, they lust after it, are greedy for it, and are ready to destroy themselves, and those around them, over whom they have any influence, to gain it. Save everything . . . save all the money that you can D&C 48:4 If you have more than you need . . . Ask your neighbors to help • The time will come that gold will hold no comparison in value to a bushel of wheat. investment paths

  12. 6 Investment Essentials • More than one company • Diversification • More than one investment objective • Allocation investment paths

  13. Modern Portfolio Theory "In choosing a portfolio, investors should seek broad diversification, Further, they should understand that equities--and corporate bonds also--involve risk; that markets inevitably fluctuate; and their portfolio should be such that they are willing to ride out the bad as well as the good times."     Harry Markowitz, October 7th, 2008 Harry Markowitz Essay “Portfolio Selection” (1952) Nobel Prize in 1990 Long-term market performance – very efficient Green -5% Short-term – irrational and inconsistent Yellow 7% Key to performance - diversification Total Portfolio 2% Green 20% Yellow 10% Total Portfolio 15% investment paths

  14. Portfolio Allocation Conservative Balanced Balanced Equity Tilted Equity Investment Grade Bonds 60% 40% 25% 0% Emerging Markets Bonds 0% 0% 0% 0% Large Cap U.S. Stocks 30% 40% 50% 65% Small Cap U.S. Stocks 5% 8% 10% 15% International Stocks 5% 12% 15% 20% Commodity Futures 0% 0% 0% 0% investment paths

  15. Downside Risk Investment losses hurt more than gains help $100,000 LOSS GAIN $ 75,000 50% Gain 50% 100% 75% 43.8% $ 50,000 50% Loss 33% 50% 20% 25% investment paths

  16. Downside Risk Investment losses hurt more than gains help $100,000 $ 96,000 20% Gain LOSS GAIN $ 80,000 20% Loss 50% 100% 75% 43.8% 33% 50% 20% 25% 10% 11% investment paths

  17. “Money You Can Afford to Lose” The ‘Rule of 72’ Year Six $ 19,738 $ 17,623 Year Five $ 15,735 Year Four $ 14,049 Year Three $ 12,544 Year Two $ 11,200 Year One $ 10,000 Investment investment paths

  18. “Money You Can Afford to Lose” The ‘Rule of 72’ $640,000 – Age 56 $80,000 – Age 38 $160,000 – Age 44 $320,000 – Age 50 $40,000 – Age 32 $20,000 – Age 26 investment paths

  19. “Money You Can Afford to Lose” The ‘Rule of 72’ $1,280,000 – Age 62 $640,000 – Age 56 $40,000 – Age 32 $20,000 – Age 26 investment paths

  20. “Money You Can Afford to Lose” The ‘Rule of 72’ $1,280,000 – Age 62 investment paths

  21. $ 2,400 2,200 2,000 1,800 1,600 1,400 Annual Yield 1,200 1,000 800 600 400 200 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Annual Yield investment paths

  22. 6 Investment Essentials • More than one company • Diversification • More than one investment objective • Allocation • Historical Valuation Pricing • ‘Active’ buy-and-hold investment paths

  23. Historical Valuation Pricing Technology Sector Substantially Over Priced Average Total Yield Sell 13% The Goal Pre-established Formula Based on Long-Term Total Return Buy Transactions – No Emotion or Speculation Substantially Under Priced Emotion and Speculation = Market Timing investment paths

  24. investment paths

  25. 11% investment paths

  26. 6.5% investment paths

  27. 11% 6.5% investment paths

  28. 6 Investment Essentials • More than one company • Diversification • More than one investment objective • Allocation • Historical Valuation Pricing • ‘Active’ buy-and-hold • Manage the Managers investment paths

  29. Mark Hulbert Story • Investment Newsletters • Rating Investment Advice • Rating Investment Companies • Largest circulation newsletter - lowest rating • “Mark Hulbert started his newsletter to help you choose yours. Based on proven performance, not unproven claims.” investment paths

  30. Hulbert Mutual Fund Performers – Top 3 • Litman Gregory • Value Line • No Load Fund X investment paths

  31. 6 Investment Essentials • Diversification • Allocation • Historical Pricing Models • Manage the Managers • Investing More Money • Store Food & other Emergency Provisions investment paths

  32. Minimize Investment Expenses • Mutual Funds – Purchase and manage the investment for an additional fee Average annual expense 1% (Annuity average annual expense 3%) • Index Funds – Purchase the investment / No management fee Average annual expense .25% • Superior Performance – past 20 years Index Funds 72% of the time investment paths

  33. INVESTOR -Commission -No Load $$$ Mutual Fund Shares Reinvested INDEX FUND INC (Investment Company) MUTUAL FUND INC (Investment Company) Dividends Components of Return Dividend Income Dividends Capital Gain Income Interest Cap Gains (losses) Stock Expenses Realized Management Fee Unrealized - IBM Custodial Fee - Microsoft - Enron - AT&T 72% of Index Funds Outperform their Mutual Fund Equivalent - Fly by Night Inc. - Chevron investment paths

  34. INVESTOR -Commission -No Load $$$ Mutual Fund Shares Variable Annuity Units Reinvested INDEX FUND INC (Investment Company) VARIABLE ANNUITY (Insurance Company) Dividends Components of Return Dividend Income Dividends Capital Gain Income Interest Cap Gains (losses) Stock Expenses Realized Management Fee Unrealized - IBM 2.44% Custodial Fee Insurance Fee - Microsoft Commission Fee - Enron - AT&T 72% of Index Funds Outperform their Mutual Fund Equivalent 78% of Mutual Funds Outperform their Variable Annuity Equivalent - Fly by Night Inc. - Chevron investment paths

  35. Vanguard • LifeStrategy Accounts • Target Retirement investment paths

  36. investment paths

  37. investment paths

  38. Four Types of Investments Fraud 1.No Investment Ponsi Schemes 12 Daily Pro ‘Nigerian’ Inheritance “40% Return Per Month” ‘Secret’ Investments “Prime Bank Notes” 2. Speculative Investments Currency Trading Arbitrage Futures Hedge Funds Commodity Options 3. Diversified / Allocated Investments 4. ‘Too Conservative’ investment paths

  39. What is Opportunity Cost? The cost of forgoing the next best alternative investment paths

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