seminar2

Goal Setting

"The indispensable first step to getting the
things you want out of life is this…

Decide what you want.”


•
Retirement
–

when…how much…

•
Home Purchase

•
Match Asset and Liabilities

Fairport Asset Management, LLC

10 Questions to ask advisor, broker etc
.

1.
What services will we receive?

2.
What will be the fees for these services? Any extra or hidden
charges? How are you compensated?

3.
Who will be our personal account person? For how long?

4.
How will we determine the asset allocation of our portfolio?

5.
What is your typical client engagement, what is average account
size?

6.
What detailed information will we receive on the portfolio holdings?

7.
What are the terms of any termination of your services?

8.
Please review the performance of your investment services
compared to national indices and competitors.

9.
What are the mechanics of receiving access to our money in case of
emergency?

10.
I assume that you provide the necessary reports for income tax
preparation.


Fairport Asset Management, LLC

1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Real Estate
Large-Cap
Large-Cap
International
Real Estate
Real Estate
Commodities
International
Real Estate
International
BEST
Emerging
Emerging
Emerging
35.8%
33.4%
28.6%
66.5%
25.9%
15.5%
23.9%
55.9%
30.4%
34.0%
Large-Cap
Mid-Cap
International
International
Commodities
Fixed
Fixed
Small-Cap
International
Commodities
Developed
Developed
Emerging
23.0%
32.3%
20.0%
27.0%
24.2%
8.4%
10.3%
38.8%
25.6%
17.5%
Small-Cap
Small-Cap
Mid-Cap
Large-Cap
Mid-Cap
Small-Cap
Real Estate
International
Small-Cap
International
Developed
Developed
21.3%
25.6%
19.1%
21.0%
17.5%
6.5%
5.2%
38.6%
22.7%
13.5%
Mid-Cap
Real Estate
Fixed
Commodities
Small-Cap
Mid-Cap
International
Real Estate
International
Mid-Cap
Emerging
Developed
19.2%
18.9%
8.7%
17.3%
11.8%
-0.6%
-6.2%
38.5%
20.3%
12.6%
International
Fixed
Small-Cap
Mid-Cap
Fixed
International
Mid-Cap
Mid-Cap
Mid-Cap
Real Estate
Developed
Emerging
6.1%
9.7%
-1.3%
14.7%
11.6%
-2.6%
-14.5%
35.6%
16.5%
8.3%
International
International
Commodities
Small-Cap
Large-Cap
Large-Cap
Small-Cap
Large-Cap
Large-Cap
Small-Cap
Emerging
Developed
6.0%
1.8%
-13.2%
12.4%
-9.1%
-11.9%
-14.6%
28.7%
10.9%
7.7%
Fixed
Commodities
Real Estate
Fixed
International
International
International
Commodities
Commodities
Large-Cap
Developed
Developed
Developed
3.6%
-5.0%
-18.8%
-0.8%
-14.2%
-21.7%
-15.6%
22.7%
7.6%
4.9%
Commodities
International
International
Real Estate
International
Commodities
Large-Cap
Fixed
Fixed
Fixed
Emerging
Emerging
Emerging
WORST
1.3%
-11.6%
-25.3%
-6.5%
-30.8%
-22.3%
-22.1%
4.1%
4.3%
2.4%
Fixed Income - Lehman Bros. US Aggregate Index
Real Estate - NAREIT All REIT
Mid-Cap - S&P Mid Cap 400 Index
International Developed - MSCI EAFE Index
Commodities - Dow Jones Commodities Index
International Emergings - MSCI Emerging Mkts Index
WEB: www.fairportasset.com
TOLL FREE: 1-800-222-7459
PHONE: 216-431-3000
Historical Illustration of Diversification Through Market Indices
Annual Total Returns (1996 - 2005)
Ranked best to worst in order of performance
Large Cap - S&P 500 Index
3636 Euclid Avenue
Fairport Asset Management, LLC
Small-Cap - S&P Small Cap 600 Index
Cleveland, OH 44115
11

12

13

14

15

9

11

13

15

17

19

21

23

25

27

Standard Deviation

Compound Annual Return

1 Asset Class Portfolio

2 Asset Class Portfolio

3 Asset Class Portfolio

4 Asset Class Portfolio

C (Real Estate Securities)

A (U.S. Stocks)

B (Non
-
U.S. Stocks)

D (Commodities)

CD

BD

AD

AC

BC

AB

ABC

ABD

BCD

ACD

ABCD

Source: Copyright 2005 SunGard Expert Solutions. Derived from the works of Roger C. Gibson, “Asset Allocation and the Reward
s o
f Multiple
-
Asset
-
Class Investing”, Copyright 1998 Roger C.
Gibson. Updated by author. The information herein is believed to be reliable but SunGard Online Investment Systems does not

wa
rrant its completeness or accuracy. Past performance is not
indicative of future results. This does not constitute an offer or solicitation of any security or product nor constitute a
rec
ommendation of the suitability of any investment strategy for a particular
investor.

Four
-
Asset
-
Class Diversification

1972
--

2004

The Five Worst Years


1972
--

2004

Portfolio Structures

A

U.S.

Stocks

B

Non
-
U.S.

Stocks

C

Real Estate

Securities

D

Commodities

ABCD

Equal Allocation

Year

Return

Year

Return

Year

Return

Year

Return

Year

Return

1974

-
26.45

1990

-
23.20

1974

-
21.42

1998

-
35.75

2001

-
12.77

2002

-
22.12

1974

-
22.15

1998

-
17.51

2001

-
31.93

1974

-
7.63

1973

-
14.67

2001

-
21.21

1973

-
15.52

1981

-
23.01

1981

-
5.73

2001

-
11.88

2002

-
15.66

1990

-
15.34

1975

-
17.22

1990

-
3.16

2000

-
9.13

1973

-
14.17

1999

-
4.62

1997

-
14.07

1998

-
1.04



$61.19




Growth of $1: Portfolio ABCD vs. Portfolio A

(Equal Allocation vs. U.S. Stocks)

$35.51

0
10
20
30
40
50
60
70
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
YEAR ENDING
DOLLARS
ABCD (Equal Allocation)
A (U.S. Stocks)

Investment Options


•
Stocks

–

Large, Mid, Small, Growth Value, International


•
Bonds

–

Gov’t, Municipal, Corporate, High Yield, Short,
Intermediate, Long


•
Reits

–

real estate investment trusts


•
ETFs

–

exchange traded funds


•
Mutual Funds


•
Commodities


Fairport Asset Management, LLC

Favorite Websites

•
http://finance.yahoo.com/


•
http://www.investopedia.com/


•
http://www.morningstar.com/


•
www.capandcompass.com


“Life after school explained” book.



Fairport Asset Management, LLC

Rebalancing


•
The

process

of

realigning

the

weightings

of

one's

portfolio

of

assets
.

•
Important

way

to

reduce

risk
.

•
Allows

for

more

consistent

returns
.


Consistent Returns= increased compounding= increased wealth

Retirement Options

•
401k
–

2006 max contribution limit of $15,000


•
401k Roth


•
403b
–

2006 max contribution limit of $15,000


•
Traditional IRA
-

$4000 max contribution


•
Traditional Roth


•
Annuities
–

no limit


Fairport Asset Management, LLC