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Source: Mailed invitation.
Location: Maggiano’s, McLean, VA
Sponsor: Cassaday & Company
Topic: “How to Make Smart Decisions about Your Investments in Retirement.”
Speaker: Stephen Cassaday
Credentials, Brokers, Associations, Endorsements: Registered Financial Consultant (RFC), Certified Financial Planner (CFP), CFS. Securities offered through Royal Alliance Associates.
Immediate pressure: None
Appointments: Guests were encouraged to request an appointment.
Information Requested: None. Guests could have two 90-minute free consultations. Cassaday promises “a no cost and no obligation overview of what you are currently doing.”
Rate of Return: Highest was 18.33% annualized if fully invested in the S&P500 from December 31, 1995, to December 31, 2000.
Investments Discussed: Equities, debt, hard assets, and cash equivalents. No detailed discussion of advantages/disadvantages or risks. Guests were not encouraged to buy such products.
Phrases emphasized: Consolidation (all investments with one manager). Asset allocation. Diversification.
Meal: Group portions of salad, white bread, coffee (on the menu, but not served unless repeatedly requested, as I did), lasagna, salmon, chicken piccata (on the menu, but never served to my table), rigatoni, breaded and sugared apples, cake, ice cream. [The problem with group portions when the other guests are big and hungry is that not much is left in the group bowls by the time the items get passed down to the thin people. The problem with free meals is that the waiters have no incentive to serve anything.]
Number of Guests: about 40.
Warm-up discussion: None.
Main discussion for approximately 2:10 hours by Steve Cassaday: [The speaker used 98 slides.] Retirees face a funding challenge because they are retiring earlier, living longer, and coping with inflation. Retirees need investment success to maintain their lifestyle. Diversity can lower risks. Emotions cause people to make intellectual and behavioral mistakes. Smart money (a large professionally managed pool of assets) uses asset allocation to achieve reasonable long-term rates of return consistently and with reduced risk. Asset allocation reduces the need for research. Market timing is not effective. The speaker authored an article in the September 2006 Journal of Financial Planning, entitled “DIESEL: A System for Generating Cash Flow during Retirement.” DIESEL is an acronym for dividends, interest, and equity select liquidations. It is the author’s system of combining portfolio rebalancing with sustainable withdrawals. Monthly income from the DIESEL system goes into a money market account, from which bills can be paid automatically. If all financial assets are consolidated with one financial advisor, then the retiree gets simplified paperwork, record keeping, and tax preparation. The selected advisor should receive a fee rather than commissions; should offer all investments rather than proprietary mutual funds; should have appropriate credentials; and should have experience. The speaker’s firm, founded in 1993, now has 21 employees. One of the slides showed Cassaday’s exact fee schedule, starting with accounts of $500,000. Any guest who accepts the speaker’s portfolio review will “be more fully assured that you are taking advantage of all of the things available to you.” The speaker called himself unabashedly bullish. He has never seen a better buying opportunity (Dow at 8,420 on 11/18/2008).
Summary: This was one of the most thorough presentations imaginable. The speaker discussed the four asset classes, diversification, consolidation, fee schedules, and free financial overviews.