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  • Welcome to DakHartsock.com! Whether you have $10,000 or $10 million, these easy to read articles and videos will help you understand investment and personal finance better. Sign up on the right to get an automatic notification when I release a new article or video (3-5 per month).

Stay tuned. More on the way. To Smarter InvestingDak

Most recent articles below…

Markets in Minutes: December 2, 2017

S&P 500    Tax Cuts     10 Year Treasury    Gold    World Ex-US    US Dollar    Commodities   US Economy   Stock Market Valuation

Markets in Minutes is intended to give our client partners and subscribers a quick and easy understanding of current market conditions. This update covers November 1 – November 30, 2017 CLICK HERE to keep reading…

 

Inflation Never Sleeps November 12, 2017

Many investors and savers aren’t completely clear on what inflation does to investments and savings accounts.

I was going to write out an article, but decided to share this short, simple (and important) video instead. CLICK HERE to watch short video…

 

Markets in Minutes: October 30, 2017

S&P 500     10 Year Treasury     Gold     World Ex-US     US Dollar     Commodities     US Economy     Stock Market Valuation

Markets in Minutes is intended to give our client partners and subscribers a quick and easy understanding of current market conditions. This update covers October 1 – October 30, 2017
CLICK HERE to keep reading…

 

ACI 2nd Half 2017 Market Outlook & 1st Half Results

It’s been an interesting and largely rewarding year in the markets so far as many ACI expectations have come to pass. While ACI is not in the forecasting game, it is nice when general expectations are mostly born out.

CLICK HERE to keep reading…

 

Market Valuation: The S&P 500 is Cheaper Than in 2015/2016 — July 9, 2017

Headlines and the financial media are again selling the risks posed by high valuations.

The simplest perspective on the expense of the market, and probably the broadest, is the price-to-earnings ratio. 

It’s important to note that high valuations do not imply or cause bear markets – rather they imply lower expected returns.  It’s like buying…CLICK HERE to keep reading…

 

The Mostly Exaggerated Death of Retail — July 9, 2017

The airwaves and internet are full of news hailing the death of retail at the hands of Amazon. 

Will retail look very different in 10 years?  Absolutely.  But that’s only part of the story. It’s not all about Amazon’s dominance.

A recent, widely publicized study found that 43% of every online dollar spent passes through Amazon, and this was considered suitable evidence that brick and mortar is on the way to extinction.

But this doesn’t account for the 86% of retail purchase activity that occurs in brick and mortar stores, nor does it account for the brands that are investing in technology to understand their customers better, streamlining operations, and widening their online opportunities. 
CLICK HERE to keep reading…

Laid Off By Microsoft–Choices for Your 401(k), Microsoft Stock & Non-Qualified Deferred Compensation

This article was written to help Microsoft employees gain a solid understanding of what to do with their 401(k)s, ESOP shares and non-qualified deferred compensation plans when they leave the company.

WARNING:  This is a long article and includes many specifics.  If you already understand everything you need to know about the Microsoft Corporation Savings Plus 401(k) plan, the ESOP and/or the non-qualified deferred compensation plan and the different choices you are now facing–keep it at Microsoft, roll it to another 401(k) or to an IRA, tax consequences, the investment choices outside the 401(k), which companies to avoid, how to choose where to move the account, etc.– this article probably isn’t for you.

It’s geared for the people that need and want answers to clearly understand their choices and are willing to invest some time to make the best possible decisions for themselves and their financial prosperity.  CLICK HERE to keep reading… 

 

Markets in Minutes June 30, 2017

S&P 500   10 Year Treasury   Gold   World Ex-US   US Dollar   Commodities

Markets in Minutes is intended to give our client partners and subscribers a quick and easy understanding of current market conditions. This update covers April 15 – June 30, 2017.
CLICK HERE to keep reading

 

Valuations, Stock Returns & Interest Rates June 10, 2017

“Let’s start by defining ‘investing.’ The definition is simple but often forgotten: Investing is laying out money now to get more money back in the future – more money in real terms after taking inflation into account.
CLICK HERE to keep reading

 

 

How to Get More Income (and More Safety) from the Markets. May 14, 2017

Investors take advantage of 3 major ways to generate income from the market; dividends from bonds or stocks, pure stock dividend strategies, or preferred stock plays where the yield is higher than a normal stock dividend strategy but maintains the possibility of capital growth.
CLICK HERE to keep reading

 

Markets in Minutes April 30, 2017

Markets in Minutes is intended to give our client partners and subscribers a quick and easy understanding of current market conditions. This update covers April 17 – April 28, 2017.
CLICK HERE to keep reading

 

 

2 Things To Do Today To Retire Rich (Or At Least Worry Free) April 23, 2017

Every success in life begins with understanding what it takes to realize that success and then working towards that goal over time. Retirement is no different. The younger you are when you develop this understanding, the more likely retirement will meet your hopes.
CLICK HERE to keep reading

 

 

Markets in Minutes April 15, 2017

S&P 500   10 Year Treasury   Gold   World Ex-US   US Dollar   Commodities

Markets in Minutes is intended to give our client partners and subscribers a quick and easy understanding of current market conditions. This update covers March 20 – April 14, 2017. CLICK HERE to keep reading…

 

Here’s How to Get Better Investment Returns April 02, 2017

“Greedy, short-term orientated investors may lose sight of a sound mathematical reason for avoiding loss; the effects of compounding on even moderate returns over years are compelling, if not downright mind boggling.”
CLICK HERE to keep reading

 

 

Markets in Minutes March 20, 2017

Markets in Minutes is intended to give our client partners and subscribers a quick and easy understanding of current market conditions. This update covers March 1 – 17, 2017.
CLICK HERE to keep reading

 

 

Cut Your Taxes & Fatten Your Retirements March 12, 2017

One of the simplest ways is to contribute money to your retirement. If you are self-employed, you may be able to deduct up to $53, 000 from your 2016 Earned Income and then use that money to fund your retirement.
CLICK HERE to keep reading

 

 

Markets in Minutes February 28, 2017

Markets in Minutes is intended to give our client partners and friends a quick and easy understanding of current market conditions.
CLICK HERE to keep reading

 

 

Markets in Minutes February 5, 2017

Markets in Minutes are short video updates that survey the 6 major asset classes US investors typically invest in. Each update features 3 asset classes to help investors understand what is happening in each market.
CLICK HERE to watch short video

 

 

Become a Stock Market Landlord January 29, 2017

Stocks are for buying, not renting.Or are they?The fact is that stocks can be used for consistent income while reducing the volatility (or risk) of holding stocks.
CLICK HERE to keep reading
estimated reading time is 4 minutes.

 

 

Markets in Minutes January 22, 2017

This week I take a look at the current set up in gold, world stocks ex-US, and the US Dollar. You may use the player controls to fast forward, stop, or review whichever sections of the update are most relevant to you. The numbers below reflect the point in the video where each market update begins.
CLICK HERE to watch short video

 

 

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Process Portfolios 2016 Performance Summary January 15, 2017

It was a pretty good year for ACI portfolios with Market Income and Durable Opportunities providing particularly strong risk adjusted returns. The video is front loaded with the key information first and then a brief discussion of how each portfolio did over the year. CLICK HERE to watch short video

 

 

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Markets in Minutes January 8, 2017

Markets in Minutes are short video updates that survey the 6 major asset classes US investors typically invest in. Each update features 3 asset classes to help investors understand current conditions in each market. In this update: the S&P 500, 10 Year Bond, Commodities. CLICK HERE to watch short video

 

 

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Markets in Minutes December 2016
This short video offers a quick survey of the major markets that normally attract US investors and their current condition including the S&P 500, 10 Year US Treasury, gold, world stocks ex-US, and the US Dollar. CLICK HERE to keep reading or watch the short video…

 

 

 

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This Simple Trick Can Make You Wealthy December 18, 2016
Americans come in 4 groups. Do you know which group you are in?

Are you in the group that follows a simple strategy to either become wealthy or increase their wealth if they are already there?

CLICK HERE to keep reading, 450 words, estimated reading time is 3 minutes…

 

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Trump and Your Taxes – Changes are Coming December 4, 2016

First off, it’s important to understand that it’s unlikely all of Trump’s tax proposals will come to pass.  Regardless, there are a couple big takeways to consider given the potential scale of impending changes and the high probability tax rates will be lower soon. 

  1.  Discuss deferring whatever income you can into the…CLICK HERE to keep reading, 366 words, estimated reading time is 2 minutes…

 

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Trump Wins – What’s Next for the Market? From the 11/13/2016 Client Letter
Wow. What an interesting week for the markets.

A quick recap, and then a brief summary of how I see events impacting markets over the next quarters:

Early Wednesday morning, market futures began selling off as a Trump victory began to look possible. As those odds increased, the futures markets began to sell off in earnest…CLICK HERE to keep reading, estimated reading time is 4 minutes.

 

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Pre-Election Market Update November 6, 2016
First, here is a resource that may useful – www.vote411.org. This site will allow you to learn more about the issues and candidates not only on the national level but in your own community. I hope it helps everyone make a more informed vote on Tuesday.

Given the uncertainty heading into this years election, I thought a look at the Recession Probability Indicator (“RPI”) might be appropriate given that a Trump win, while a long shot according to pollsters, seems likely to stir up some short term market volatility.

A reminder – the RPI does not forecast recession – it is designed to indicate when we are already in it. CLICK HERE to keep reading, 514 words, estimated reading time is 3 minutes…

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What the Best Investors Do Differently to Manage, Invest, & Protect Their Money. October 22, 2016

A couple times a year I sponsor an educational seminar for investors. This morning I realized that everyone that reads these updates would benefit from the same information, so here is a recap of some of the core points I usually make when educating investors. CLICK HERE to keep reading, 460 words, estimated reading time 3 minutes…

 

 

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What’s the key difference between a broker, a financial advisor, and a Registered Investment Advisor? October 22, 2016

You need to understand who is on your side and who isn’t. And like most things in life, the easiest way to answer that question is to follow the money. CLICK HERE to keep reading, 940 words, estimated reading time is 4 minutes…

 

 

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Q3 Performance Update including Year-to-Date Results and 4th Quarter Outlook.

Out of respect for everyone’s time and interest, I’ve included a quick “executive” summary below and also front loaded the video with the key numbers. Those wanting a little more detail can…CLICK HERE to keep reading, 193 words, estimated reading time is 2 minutes…

 

 

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Is the Market Over-Inflated? October 2, 2016
Recently the financial media has focused on a number of pundits that claim the market is grossly overvalued, and that the Fed’s low rate policy has forced stocks into a bubble.

But are they?

An important part of wealth management is to understand the fundamental drivers of the stock market, and how they can impact market prices. This update briefly discusses these issues, and what they may mean for the market.

This update is broken into 2 parts to better serve clients and subscribers;
1) A bullet point executive summary for those only interested in my bottom line perspective.
2) A short video discussion that surveys key factors in today’s market valuation and what they may imply about the next few quarters.

CLICK HERE to keep reading or to watch the video, 290 words, estimated reading time is 3 minutes…

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images source dreamstime

Recession Odds Dip – Consumer Spending Still Rising 9/7/2016

Before we get going, I was recently asked what the point is of understanding whether or not we are entering a recession. This person had been told by their broker that to “ride the rallies you have to ride out the valleys.” Catchy, right?

The reason to understand when the economy is falling into recession is because around 80% of the time the stock market sells off hard when it does. The market usually takes a few months after the recession actually starts to figure it out, but once it starts selling most of the time it keeps going far longer than…CLICK HERE to keep reading, 570 words, estimated reading time is 3 minutes…

 

 

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Correction Around the Corner? 9/1/2016

Markets have witnessed two corrections so far this year and fears seem to be mounting that another is right around the corner. The first correction took hold following the Fed rate raise last December with the S&P 500 falling approximately -14% before markets began…

CLICK HERE to keep reading, 487 words, estimated reading time is 3 minutes...

 

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How to Avoid Taxes on 80% of Your Investment Income. Hard to believe, right? But thanks to the way the US government supports US oil and gas companies, you may only pay taxes on around 20% of your income from energy related Master Limited Partnerships (“MLPs”). As an investor, this can be a pretty good deal.

Master Limited Partnerships are required to pay out 90% of their profits to shareholders much like Real Estate Investment Trusts. Unlike REITS, the payments an MLP makes to a shareholder are considered to a “return of capital” until the full principal is paid off at which point it converts to a taxable distribution, but with potentially huge offsets to those taxes as a result of being a partnership. Energy MLP’s pay anywhere from a 4% to an 8% distribution, sometimes more.

Here’s how it works…CLICK HERE to keep reading, 1180 words, estimated reading time is 5 minutes…

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ACI Process Portfolios: 1st Half 2016 Performance & 2nd Half Outlook

The video below has the most important information in the first minutes including performance details. The video player has controls to allow you to fast forward, pause or repeat whatever section of the video is most relevant to you.

Executive Summary

    • 3/6 portfolios beat their benchmarks
    • 2 portfolios beating the market
    • Strong performance in Market Income and Full Cycle Portfolios

CLICK HERE to keep reading or watch video, 138 words, estimated reading time 1 minute, plus video…

 

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Will Brexit Take the Market Down? Only in the Short Term.

Executive Summary:
1) Odds are UK stays. If it stays markets should stay stable or move up incrementally.
2) If UK exits, equity markets could sell down 5%-20% peak to trough.
3) The real economic impact to the US is likely very small, bordering on irrelevant.
4) My current view is that markets should recover very quickly, 60 days or less as long as the US isn’t driven into recession by non-Brexit factors.
5) If Brexit does occur, at this point it should be viewed as a buying opportunity particularly in certain US sectors and high quality stocks.

Discussion:
For those that don’t know what the Brexit is, the United Kingdom is holding a referendum CLICK HERE to keep reading, 670 words, estimated reading time is 4.5 minutes…

images source dreamstime
images source dreamstime

Will a Fed Rate Raise Put the U.S. In Recession? Once again, media pundits are all atwitter about the idea the Fed will raise rates either this month or in July, pushing the US into Recession.

As before, this is less about the actual impact to the economy and more about attracting eyeballs to either sell advertising or convince investors they have to do something and do it NOW, which generally rewards Wall Street.

While the risks have risen…CLICK HERE to keep reading, 567 words.  Estimated reading time is 4 minutes…

 

 

 

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Q1 2016 Year-to-Date Results and Market Outlook Update

The included video reviews performance for all 6 Process Portfolios results year-to-date through April 15, 2016 and also features an updated Market Outlook.

We began 2016 with the worst January in at least a generation and a return to higher levels of volatility thanks to central bank statements and decisions that seem to be increasingly opaque to some market watchers. I’ve been fortunate in that the Fed hasn’t done anything far distant from my expectations, at least so far.

Despite media perceptions, careful students of the markets have seen a fair number of signs that suggest we may see smoother waters later in the year, as long as the economy does not move onto a recessionary footing. CLICK HERE to keep reading, 385 words + a video. Estimated reading time 3 minutes…

 

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images source dreamstime

There has been a lot of economic doom and gloom talk over the last couple months, with media “expert” after media “expert” saying the US economy is about to fall into a recession. It comes with the predictable warnings about a bad bear market. The vast majority of these talking heads are just voicing opinions based on their own views and often get emotional when voicing their perspective. The problem with these “experts” is there very little in the way of factual economic data to support any of their positions. CLICK HERE to keep reading 685 words; estimated reading time is 3 minutes…

 

 

 

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image source fox business

Drop Your Tax Bill: Put Money In Your Retirement Accounts
It’s that time again – Uncle Sam wants his money and smart investors are looking for ways to reduce their tax burden.

One of the simplest ways is to contribute money to your retirement. If you are self-employed, you may be able to deduct up to $53, 000 from your 2015 Earned Income and then use that money to fund your retirement. The best part? In most cases, you can take that contribution straight off your taxable income – it might even drop you a tax bracket. CLICK HERE to keep reading 516 words; estimated reading time is 4 minutes…

 

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Stock Market Outlook Q1 2016: Impending Bear Market Or Just A Correction?
I’ve front loaded this video with most of my observations in the first 4 minutes for busy subscribers/clients, but for those interested in more than a summary opinion I’ve included a deep dive into what I’m seeing in the market that drives my current view

CLICK HERE to watch video…

 

 

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4 Things You Need to Know About Investing in 2016

We’ve seen a lot of headlines recently, most of them pretty alarming to the average person. Hand in hand with those headlines we’ve seen markets make some of the most substantial short term moves in recent history. In the first 5 market days of 2016 the S&P 500 dropped nearly 6%, the biggest 1 week drop we’ve seen since August 2011 (when the S&P dropped about 11% in 5 days).

The deluge of negative news stories and depressing angles on the global economy and the stock market can be overwhelming and really create the idea that some kind of action has to be taken or something terrible will happen. CLICK HERE to Keep Reading 751 words; estimated reading time is 3 minutes…

 

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images source dreamstime

Is 2016 the Year of Recession?

This question seems to be on everyone’s minds and even talking heads in the media have decided it’s an effective topic to capture readers & viewers. CLICK HERE to Keep Reading 490 words; estimated reading time is 2.5 minutes…

 

 

 

 

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Is Your 401k Stealing From You?

One of the most widely used investment accounts is the 401k retirement savings plan. Investors from CEO’s to grocery clerks pay into these accounts as a central part of their retirement strategy. A solid 401k account can be the difference between a satisfying retirement and one filled with financial struggle.

But there are widespread problems in 401k plans, so much so that even the White House is pushing against the hidden fees that are buried in the vast majority of plans.
So, what are these fees and how much damage can they actually do to your account? CLICK HERE to Keep Reading 1024 words; estimated reading time is 4 minutes…;

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So, We May Have a Bump Coming in the Market

For those that don’t know, the vast majority of analysts and institutional investment managers believe that the Federal Reserve will raise rates for the first time since the Great Recession December 16th. They also see this as an overall positive for the markets. But the December 3 reaction to the European’s Central Bank statement suggests that might not actually be the case…CLICK HERE to Keep Reading 625 words; estimated reading time is 3 minutes…

 

 

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images source dreamstime

Why Recessions Kill Investment Portfolios (and Poorly Protected Retirements)

We’ve all heard “You’ve got to be in it for the long term,” or “You can’t catch the rallies unless you are in the market” from brokers or financial salespeople (they prefer “financial advisor”) and as a result more than one investor has had night sweats or an obsessive compulsion to check portfolio balances several times a day when the market starts selling off hard.

But that thinking is incredibly costly:

As you can see from this 25 year market study from…CLICK HERE to keep reading; 870 words, estimated reading time is 3 minutes…

 

 

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Market Beating Portfolios – Performance Update November 2015

Process Portfolios live portfolios and designed models have managed to achieve reasonable performance for less risk than owning an index fund, and in some cases have also provided considerably better results…CLICK HERE to Keep Reading 132 words + short video; estimated time for summary is 4 minutes…

 

 

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Broke at 80. What You Don’t Know About Long Term Care Can Hurt You, and Probably Will.

Remember the movie Saturday Night Live? There is a moment where the main character Tony, played by John Travolta, is being told by his boss he needs to think about the future. Tony immediately tells him “Screw the future.” The store owner, who has some understanding of life, replies “No Tony, you can’t screw the future, the future screws you.”

When it comes to dealing with long term health expenses, it would be hard to find a more accurate statement. CLICK HERE to Keep Reading 1604 words, estimated reading time is 10 minutes…

 

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Is the S&P 500 Over Valued? Yes. What Should You Do?
Market Valuation Update November 2015

I’ve broken this update into 2 parts. The first will just give the big picture summary for my executive type clients & subscribers and the second, below the illustrations, is a discussion of the factors involved for those interested. CLICK HERE to Keep Reading 328 words; estimated reading time is 4 minutes…

 

 

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images source dreamstime

Jobs Up, Spending Solid. Will December Bring Santa or the Grinch?
Recession Probability & Business Conditions Update
November 2015

I’ve posted the latest update on the RPI (Recession Probability Indicator) which rates the investment environment as stable/favorable or unfavorable/reduce investment.

Also included is my summary opinion of current conditions, what the Fed is likely to do next, and how that may impact the Market.

CLICK HERE to Keep Reading 206 words; estimated reading time is 2 minutes…

 

 

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images source dreamstime

Will the Economy Sink or Lift the Stock Market? RPI & Business Conditions Update

There has been great concern recently among talking heads whether or not the Fed will raise rates and what the impact on the economy will be if they do. The fact is the US economy is trudging along and is likely to continue to do so whether or not the Fed raises rates incrementally over the next few quarters. The market’s concern, misplaced in my opinion, is that once the Fed starts hiking it won’t stop until rates are normalized. That isn’t going to happen. Any hikes will be small, and the path to…
CLICK HERE to keep reading, 321 words, estimated reading time is 3 minutes…

 

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Stock Market Plunge Got You Worried? Stock Market Outlook September 24, 2015 We’ve seen a lot of volatility (up and down, mostly down) in the market recently and headlines have some investors worried. Are there good reasons to be concerned? Maybe, but what’s really happening under the stock market’s hood? CLICK HERE for short video summary…

 

 

 

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images source dreamstime

Is the Fed in Danger of Starting an Accidental Recession? RPI & Business Conditions Update Some recent headlines are talking about an accidental recession. Can a premature rate raise spark a recession? CLICK HERE to keep reading, 380 words, estimated reading time is 4 minutes…

 

 

 

 

 

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ACI Selected For 2015 Wealth & Money Management Awards! My investment firm has been selected in two categories…CLICK HERE to keep reading, 300 words, estimated reading time is 3 minutes…

 

 

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Is the Market Crashing? Stock Market Outlook August 23, 2015

Click below to see the short video of my current market outlook. I thought I’d release this a couple days early given the big selloff we saw in the market last week.

Summary: Good news–No evidence of…CLICK HERE to keep reading. 49 words, estimated reading is less than 1 minute, video is 7 minutes.

 

 

images source dreamstime
images source dreamstime

August 2015 Recession Probability & Business Conditions Update — Is Investing Still a Good Idea? A quick update on what the Recession Probability Indicator is telling us moving into the Fall.

The most recent reading (for May 2015) is…CLICK HERE to keep reading. 159 words, estimated reading time 2 minutes…

 

 

 

 

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Buffett Buying Out ACI’s Largest Holding!
Precision Castparts announced this morning that it has agreed to be acquired by Warren Buffett’s Berkshire Hathaway for $235 a share, subject to shareholder approval. ACI views this as a validation of the research process for ACI’s Durable Opportunities Portfolio. CLICK HERE to keep reading. 169 words, estimated reading time is 2 minutes…

 

 

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Ouch! Stock Market Earnings Just Fell 15%!! Should You Sell? Market Valuation Update: June 2015
The stock market is driven by valuation, and valuation is driven by earnings. This is how the wealthiest investors think, and they use that thinking to help them manage their investment risk. The term is “margin of safety” and it’s an important concept. Successful investors are searching for that margin of safety, whether they are small investors with a million or two, or a vast mutual fund with hundreds of billions under management. Big or small, investment success demands the same discipline.

So what return might you get if you buy the S&P 500 or Energy Sector right now?  Click HERE to Keep Reading 1005 words; estimated reading time is 5 minutes…

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Recession Probability Indicator Update: May 2015.

As you may recall from last month’s reading, one of the key components of the RPI recorded a 3rd negative month in a row, an event that has only occurred three times in the last 15 years and two of those occurrences preceded recessionary bear markets.

Click Here to Keep Reading 118 words; estimated reading time is 2 minutes…

 

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Stock Market Outlook: May 2015 — Where Does the Market Go from Here?
The introduction is a bit over a minute long and then I’ll walk you through some key aspects of the S&P 500 both in charts and from a fundamental standpoint to help build your understanding of where the market may be heading.

Click to Watch Video

 

 

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Is the Market Too Hot, Too Cold, or Just Right? Market Valuation Update: April 2015

Do these headlines look familiar?

Is the Stock Market Rocket Out of Fuel?
Buy Stocks, More Room to Run.
Market Way Overvalued.
8-9 Years Left in Bull Market.
You are probably getting tired of seeing articles like these. I know I am. These are headlines I took from various financial media sites over the last 120 days. Makes zero sense, right? It seems like when the market is selling off the media wants opinions about how the market is under-valued. When it’s heading up, they want to hear that it’s over-valued. This sells ads and drives investor activity, which is good for the financial media and for Wall Street.

Not usually so good for the individual investor.

This update is about getting away from opinions and evaluating the market’s condition based on current and historical facts. Click Here to Keep Reading 947 words; estimated reading time is 10 minutes…

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Economy Showing Signs of Wear? — Recession Probability Indicator Update April 2015

One of the major components of the RPI has recorded it’s 3rd negative month in a row. This has occurred three times previously in the last 15 years. Two of those occasions marked the beginning of market declines that ultimately became crashes. Click Here to Keep Reading 241 words; estimated reading time is 2 minutes…

 

 

 

 

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2014 IRA Contribution Basic Guidelines

Just a quick update as tax season is on us and in some situations contributing to your IRA may lower your tax bill. If you are self-employed, you may be able to deduct up to $52,000 from your 2014 Earned Income, and then use that money for your retirement investments. Read on.

2014 IRA contributions need to be made no later than April 15, 2015. The earlier you get it in the better – mistakes happen, and the IRS doesn’t care. Give yourself some time for the unexpected. Click Here to Keep Reading 410 words; estimated reading time is 5 minutes…

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US Economy Plugging Along – Recession Probability Indicator Update March 2015…

The Recession Probability Indicator (“RPI”) is a tool I developed for measuring the strength of the American economy. When the RPI signals increasing odds of recession, the investment environment for stocks usually becomes unfavorable, which basically means stocks go down more than up during such periods. Click Here to Keep Reading  174 words; estimated reading time is 2 minutes…

 

 

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The Fed Quietly Keeps QE Going

Just like the balance sheet of any company, the balance sheet of Federal Reserve includes a large number of distinct assets and liabilities. The FED has been engaging in quantitative easing policies (called QE policies) to stimulate an economy that has continued to recover well below potential.

Since the Fed embarked on the first QE program about 5 years ago, the balance sheet of Federal Reserve has ballooned to over $4 trillion dollars. This expansion has been an item of broad concern. Perhaps as a result of such concerns, the Federal Reserve “officially” ended QE in October 2014. Click here to Keep Reading 364 words; estimated reading time is 4 minutes…

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Alternative Ways to Manage Health Care Expense using Inexpensive Term Insurance

It’s widely known that one of the largest costs for Americans is health care. In retirement, many Americans make the often incorrect assumption that Medicare or Medicare supplemental insurance will handle the bulk of their medical expenses. Even those that think more realistically about their long term health expenses are taken aback by the expense of long term health care policies and their limitations.

Is there another way? Click Here to Keep Reading 619 words; estimated reading time is 6 minutes…

 

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Warm Regards,

Dak Hartsock
Chief Investment Officer
ACI Wealth Advisors
Process Portfolios

© Copyright 2015
Dak Hartsock

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Investment Management

For ACI, investment management begins with understanding and actively managing risk for our clients and partners.  We do this through smarter investments built on low cost, highly liquid and diversified investments rather than expensive financial products.

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Understanding the needs of investors seeking stable results for portfolios greater than $500,000 is a core strength of ACI.  One of the most important things we do is help your investments to create stable income while generating sufficient growth to meet your future demands and the needs of those you care for. 

ACI uses customized planning and software to create retirement income plans to meet the specific needs of each of clients while providing confidence, flexibility, and cost efficiency.

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FINANCIAL PLANNING

Success in any endeavor comes from hard work, vision, and planning. We can help you create a more confident future by working with you, your CPA, your tax and estate counsel to make sure that when the tomorrow becomes today, you are where you want to be.

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Market Income

This portfolio invests in a basket of highly liquid Index or Sector securities and sells off atypical returns in exchange for a premium on a rolling basis. That’s a fancy way of saying we take the bird in hand and let someone else have the two in the bush.  We buy sectors that are undervalued relative to the rest of the market or vs. their historical value ranges which reduces downside risk vs. the broad market.  Typically out-performs in bear markets, neutral markets and mild bull markets.   while under-performs strong bull markets.

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Core Equity

Invests in diversified components of the financial markets and broad economy by targeting sectors which demonstrate the greatest potential for a consistent range of multi-year returns, while offering a risk adjusted investment profile equal to or lower than the broad markets.  Our research tells us which sectors demonstrate the greatest potential for consistent multi-year returns while offering greater risk efficiency than the broad markets.  We invest on an “Outcome Oriented” basis – meaning we have a good idea what the returns over time will be at a given purchase price.

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Durable Opportunities

This portfolio invests in companies possessing a Durable Competitive Advantage.  Such companies are likely to be around for decades, easing the concern of principal return.  DCA companies often suffer less in bear markets and usually lead recoveries.  These companies allow ACI to build portfolios with minimum expected returns that can be in the mid-single digit range over any 3-5 year period which can provide long term stability partnered with long term growth in equity.

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Full Cycle

This portfolio is derived from the ground breaking work in ‘risk parity’ by Ray Dalio, arguably one of the top 10 money managers in history and founder of Bridgewater Associates.  The Full Cycle portfolio is built on the allocation models Ray designed to provide the highest potential risk adjusted returns possible through all phases of the economic cycle.  Bridgewater’s “All Weather” fund was designed for pension funds and other large institutional investors that needed to earn stable returns with stable risk, and has been closed to new investors for years.  At the time the fund closed, the All Weather Portfolio had a minimum required investment of $100 million.

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Equity Builder

This is a risk management overlay which helps build and protect accounts by collecting small premiums against held positions on an opportunistic basis during correcting markets.  EQB seeks to collect an extra 2% – 5% per year against the cost of underlying investments.  While primarily targeted at increasing account equity, EQB gives an extra layer of protection to capital during periods of higher volatility.

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Fixed Income

Diversified, broad exposure to fixed income ETFs and best of breed no load funds including core fixed income components such as Government, Corporate or MBS, municipals, and unconstrained “Go Anywhere” funds.

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ACI Investment Team

 

Dak Hartsock; Investment manager with over 15 years of experience with securities & securities options. Dak has worked full time in the financial markets since 2007. He has more than a decade of operating experience as a business owner & developer, with substantially all personal net worth invested in ACI. He is a graduate of the University of Virginia.

Robert Hartsock; MBA. Bob has over 30 years of senior management experience in diverse markets, products and businesses. He brings an exceptional record that includes management roles in two Fortune 500 companies and leadership of 7,500+ employees. Bob’s career features a specialization in identifying and fixing management and operational problems for multiple companies including leading over a dozen acquisitions, private placements and a public offering. He is uniquely positioned to provide ACI with highly relevant C-Level management perspective. Bob provides operational & macro perspective on investments ACI undertakes for client portfolios. Bob holds degrees from University of Illinois and University of Washington.

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Privacy Policy & Disclosures

Privacy Policy & Disclosures

DakHartsock.com has a STRINGENT PRIVACY POLICY.

My Commitment to You

I will not share your email address or contact information with unaffiliated third parties under any circumstances except as required by law or at my discretion if information is requested by law enforcement.

DakHartsock.com protects the security and confidentiality of the personal information you supply to the site and makes efforts to ensure that such information is used for proper purposes in connection with your interest in the site or the published materials on www.dakhartsock.com I understand that you have entrusted us with your private information, and I do everything possible to maintain that trust. As part of protecting your privacy, subscribing to updates from dakhartsock.com requires you to opt-in twice: once when you complete the opt-in form on the site, and again via the email address you provided.

This is not a contract, but a clear statement of good intent.

Email dhartsock@aciwealth.com if you have additional questions or concerns regarding the site’s privacy policy or use the form provided on the contact page.

This web site reflects the opinions of Dak Hartsock and is not intended to offer personalized investment advice. Information regarding investment products, strategies, and services is provided solely for educational and informational purposes. Other information provided on the site, including updates on the Recession Probability Indicator (“RPI”) are presented for educational purposes and are not recommendations to buy or sell securities or solicitation for investment services.

Dak Hartsock does not provide personalized investment advice over the internet, nor should any information or materials presented here be construed as personalized investment or financial advice to any viewer. Mr. Hartsock is not a tax advisor and investors should obtain independent tax advice regarding investments. Neither Dak Hartsock, ACI Wealth Advisors, nor any affiliated persons or companies accept any liability in connection with your use of the information and materials provided on this site.

Dak Hartsock is a Series 65 licensed and registered Independent Advisor Representative with ACI Wealth Advisors, LLC (“ACI”). ACI is a Registered Investment Advisor (“RIA”), registered in the State of Florida and the State of California. ACI provides asset management and related services for clients in states where it is registered, or where it is exempt from registration through statute, exception, or exclusion from registration requirements. ACI is in no way responsible for the content of DakHartsock.com nor does ACI accept any responsibility for materials, articles, or links found on this site. A copy of ACI’s Form ADV Part 2 is available upon request.

Market data, articles, blogs and other content on this web site are based on generally-available information and are believed to be reliable. Dak Hartsock does not guarantee the accuracy of the information contained in this web site, nor is Mr. Hartsock under any obligation to update any information on the site. Information presented may not be current. Any information presented on this site should not be construed as investment advice or a solicitation to buy and sell securities under any circumstances.

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Model & Performance Disclosures

Disclosures Regarding Investment Performance Reporting in compliance with Rule 206(4)-1(a)(5).

Visit http://www.dakhartsock.com/process-portfolios-historical-performance/ for historical performance of ACI’s Process Portfolios.

Market Income Portfolio
1. The performance of the broad market over the same time periods is included for both model and live portfolio to help investors understand market conditions present during the period examined by the model and during live investment.
2. Listed Index models and graphs do NOT include transaction, fund or Advisor Management fees as the index model is not available for investment. Live portfolio results include all fees, including Advisor Management fees.
3. Model results do NOT reflect reinvestment of dividends or other earnings. Actual results reflect limited reinvestment of dividends and other earnings, but do not reflect the impact of any applicable taxes which vary by investor and account type (deferred account vs. taxable, etc.).
4. Investing involves risk, including risk of loss and/or principle. While the Index model has historically shown reasonable performance versus the S&P 500 on a risk adjusted basis, there is no guarantee that will continue into the future. Market Income is designed to provide reasonable returns for less risk than the broad market on a risk adjusted basis, and while the firm believes model portfolios are capable of continued outperformance on this basis, there is no guarantee they will do so. Comparisons with the S&P 500 are included to help the average investor understand how an investment in Market Income may differ from investment in an index fund such as an S&P 500 index fund.
5. The model for Market Income is the Chicago Board of Exchange S&P 500 Buy/Write Index or “BXM.” BXM has historically displayed less volatility than the S&P 500 and Market Income. BXM cannot be directly invested in. Market Income does not exactly follow the BXM index model – the mechanics of closing and opening positions differ – BXM opens, closes or rolls positions on the same day every month regardless of the profit or loss in a position – Market Income generally, but not always, waits until after expiration before transacting. Market Income will also close or roll ahead of expiration if the position has a high percentage of profit present in order to capture that gain. Options are generally sold again within a week of the closure of the prior position, but not always, and often new position may be opened the same day the prior position is closed.
Benchmark and index comparisons are made on a best available basis – meaning that both the index model and live performance are believed to be compared with market and the closest possible benchmark for simplicity of comparison. However, there is no guarantee future volatility will be either less than, equal to, or greater than the volatility experienced in the model or the S&P 500 although the firm invests with an eye on reduced volatility vs. the S&P 500.
6. The model portfolio (BXM) utilizes the S&P 500 as its basis. Market Income differs from BXM in that the underlying securities are primarily selected on the basis of “relative” value. This simply means that sectors are compared with one another and Market Income generally invests in the sector or sector(s) trading at the greatest discount or the smallest premium relative to its historical average valuation. Other factors are also considered including sector earnings growth and expected return versus other available sector instruments. Advisor believes this gives Market Income a higher margin of safety than repeatedly investing in the S&P 500 on a rolling basis without regard to value or prevailing economic conditions, while preserving liquidity.
7. The BXM model on which Market Income is based is a non-traded index. As such, results do not represent actual trading or investment and do not reflect any impact that material economic or market factors may have had on the advisors decision making if advisor had been managing live money during the period the model covers, including transaction, fund, or management fees.
8. Market Income also differs from the BXM model in that Market Income seeks to reduce investment during recessionary economic periods while BXM stays invested regardless of economic or market conditions. Advisor believes this will better protect capital vs. BXM model but is materially different than staying invested in all market conditions. This action may cause Market Income to have reduced participation in markets that continue to move up despite Advisors reduction in investment.
9. Advisor clients have experienced results that exceed the performance of the model to date. There is no guarantee Market Income will continue to outperform BXM in the future regardless of Advisor efforts to do so.

Core Equity Portfolio
1. The performance of the broad market over the same time periods is included for both model and live portfolio to help investors understand market conditions present during the period examined by the model and during live investment.
2. Model is a historical back test and includes brokerage and fund fees but does NOT include Advisor Management fees which vary by account size, but in general reduce annual performance by approximately 1.5%. Live portfolio results include all fees, including Advisor Management fees.
Historical back-test means the model portfolio has been tracked on a backwards looking basis prior to the beginning of live investments in order to establish historical risks and results for investment in this portfolio. Back testing has certain inherent limitations as detailed in item #7 below.
3. Model results reflect regular investment of dividends or other earnings. Actual results reflect limited reinvestment of dividends and other earnings.
4. Investing involves risk, including risk of loss and/or principle. While the back tested Core Equity model has historically shown desirable performance versus the S&P 500 on a risk adjusted basis, there is no guarantee that will continue into the future. Core Equity is designed to provide reasonable returns for the same or less risk than the broad market on a risk adjusted basis, and while the firm believes model portfolios are capable of continued outperformance on this basis, there is no guarantee they will do so. Comparisons with the S&P 500 are included to help the average investor understand how an investment in Core Equity may differ from investment in an index fund such as an S&P 500 index fund.
5. The model for Core Equity is built of highly diversified, highly liquid sector and index securities, most frequently low cost ETFs. Core Equity live portfolios do not exactly follow the Core Equity model – variances in investor contributions, withdrawals, and risk tolerances result in measurable drift from the model. Over time, client accounts come closer in line with the Core Equity model.
Core Equity live portfolios may differ from the Core Equity model in an additional material way; when valuations on certain sectors become overly stretched versus their historical average valuations, the Advisor may reduce exposure to those sectors in favor of a sector position which is priced in a more reasonable range in comparison to it’s typical historical valuation. Periodically, Core Equity may allocate a small but measurable percent of assets (up to 5%) in volatility linked instruments in an effort to better manage the portfolio.
These factors may result in greater or less than model performance over time.
Benchmark and index comparisons are made on a best available basis – meaning that both the index model and live performance are compared with market and other benchmarks the
Advisors believe to be suitable for simplicity of comparison. However, there is no guarantee future volatility or performance will be either less than, equal to, or greater than the volatility or performance experienced in the model or the S&P 500 although the firm invests with an eye on reduced volatility vs. the S&P 500.
6. Core Equity invests in diversified components of the financial markets and broad economy by targeting sectors or indices which demonstrate potential for a consistent range of multi-year returns, while seeking a risk adjusted investment profile equal to or lower than the broad markets. These sectors contain a range of equity stocks with an equally broad range of characteristics – some sectors are present in the Core Equity portfolio due to their historically defensive nature, some are present due to their historical growth characteristics, some are a blend of the spectrum between. The intent is to provide a balanced equity portfolio suitable for most investors as an S&P 500 index fund replacement but which seeks lower risk while experiencing, on average, a greater return than an S&P 500 index investment.
7. The Core Equity model results do not represent actual trading or investment and do not reflect any impact that material economic or market factors may have had on the advisors decision making if advisor had been managing live money during the period the model covers, including transaction, fund, or management fees as detailed above in item #2.
8. Core Equity live portfolios also differ from the Core Equity model in that Core Equity seeks to reduce investment during recessionary economic periods while the Core Equity historical model stays invested regardless of economic or market conditions. Advisor believes this will better protect capital vs. model but is materially different than staying invested in all market conditions. This action may cause Core Equity live portfolios to have reduced participation in markets that continue to move up despite Advisors reduction in investment.
9. Advisor clients have experienced results that slightly lag the performance of the model to date. This lag is due to a number of factors, primarily the fact that different clients allocate different dollar amounts to Core Equity at different times. In general, the longer a client has been fully allocated to the Core Equity portfolio, the closer it is to model performance.
The benchmark for Core Equity (The S&P 500) has historically displayed greater volatility (risk) than the Core Equity model or live Core Equity portfolios. This may or may not be the case in the future.

Market Momentum Portfolio
1. The performance of the broad market over the same time periods is included to help investors understand market conditions present during the period covered by live investment.
2. Listed comparison Index graphs and statistics do NOT include transaction, fund or Advisor Management fees. Live portfolio results include all fees, including Advisor Management fees.
3. Actual results reflect limited reinvestment of dividends and other earnings, but do not reflect the impact of any applicable taxes which vary by investor and account type (deferred account vs. taxable, etc.).
4. Investing involves risk, including risk of loss and/or principle. While the closest benchmark for Market Momentum has historically shown reasonable performance versus the S&P 500 on a risk adjusted basis, there is no guarantee that Market Momentum that will continue such performance into the future. Market Momentum is designed to provide reasonable returns for less risk than the broad market on a risk adjusted basis, and while the firm believes the portfolio is capable of outperformance on this basis, there is no guarantee it will do so. Comparisons with the S&P 500 are included to help the average investor understand how an investment in Market Momentum may differ from investment in an index fund such as an S&P 500 index fund.
5. The closest benchmark for Market Momentum is the Chicago Board of Exchange S&P 500 Buy/Write Index or “BXM.” BXM has historically displayed less volatility than the S&P 500 and Market Income. BXM cannot be directly invested in. Market Momentum differs in key ways from BXM – the mechanics of closing and opening positions differ – BXM opens, closes or rolls positions on the same day every month regardless of the profit or loss in a position – Market Momentum targets closing or rolling positions based on technical factors including trend support and resistance. Market Momemtum will also close or roll ahead of expiration if the position has a high percentage of profit present in order to capture that gain. Options are generally not sold again until the underlying investment has moved into an area of resistance but not always; new position may be opened the same day the prior position is closed.
Benchmark comparisons are made on a best available basis – meaning that live performance is believed to be compared with the closest possible benchmark for simplicity of comparison. However, there is no guarantee future volatility will be either less than, equal to, or greater than the volatility experienced in the model or the S&P 500 although the firm invests with an eye on reduced volatility vs. the S&P 500. Market Momentum , like BXM, is an options writing strategy seeking to reduce investment volatility and improve risk adjusted returns for investors.
6. The model portfolio (BXM) utilizes the S&P 500 as its basis. Market Momentum differs from BXM in that the underlying securities are primarily selected on the basis of “relative” value. This simply means that sectors are compared with one another and Market Momentum generally invests in the sector or sector(s) trading at the greatest discount or the smallest premium relative to its historical average valuation. Other factors are also considered including sector earnings growth and expected return versus other available sector instruments. Advisor believes this gives Market Momentum a higher margin of safety than repeatedly investing in the S&P 500 on a rolling basis without regard to value or prevailing economic conditions, while preserving liquidity.
7. The BXM model on which Market Momentum is compared is a non-traded index. As such, results do not represent actual trading or investment and do not reflect any impact that material economic or market factors may have had on the advisors decision making if advisor had been managing live money during the period the model covers, including transaction, fund, or management fees.
8. Market Momentum also differs from the BXM model in that Market Momentum seeks to reduce investment during corrective or recessionary economic periods while BXM stays invested regardless of economic or market conditions. Advisor believes this will better protect capital in comparison to BXM but such action is materially different than staying invested in all market conditions. This action may cause Market Momentum to have reduced participation in markets that continue to move up despite Advisors reduction in investment.
9. Advisor clients have experienced results that exceed the performance of the benchmark to date. There is no guarantee Market Momentum will continue to outperform BXM in the future regardless of Advisor efforts to do so.

Durable Opportunities Portfolio
1. The performance of the broad market in the form of the Dow Jones Industrial Index over the same time periods is included for live portfolio comparison to help investors understand market conditions present during the period covered by live investment.
2. The Index results do not include brokerage, transaction, or Advisor fees. Live portfolio results include all fees, including Advisor Management fees.
3. Actual results reflect limited reinvestment of dividends and other earnings.
4. Investing involves risk, including risk of loss and/or principle. Portfolios compromised of companies matching the profile of those selected for including in Durable Opportunities have historically displayed superior risk adjusted performance to the Index, but there is no guarantee that will continue into the future. Durable Opportunities is designed to provide investment in companies that firm believes meet a stringent set of criteria firm believes reduces the likelihood of permanent capital impairment while allowing investors to participate in investment in companies firm believes will stand the test of time and provide superior long term returns. While the firm believes the portfolio is capable of outperformance on this basis, there is no guarantee it will do so. Comparisons with the Dow Jones are included to help the average investor understand how an investment in Durable Opportunities may differ from investment in a concentrated index fund such as a Dow Jones Industrials index fund. Durable Opportunities is not restricted to investment in industrial companies or in companies with a specific level of capitalization, unlike the Dow Jones.
5. Durable Opportunities is primarily a value driven strategy; when valuations in holdings become overly stretched versus their historical average valuations, the Advisor may reduce exposure to those holdings by either liquidation or hedging, and may re-allocate funds into a holding which is priced in a more reasonable range in comparison to it’s typical historical valuation. Periodically, Durable Opportunities may allocate a small but measurable percent of assets (up to 5%) in volatility linked instruments in an effort to better manage the portfolio.
Benchmark comparisons are made on a best available basis – meaning that live performance is compared with the benchmarks the firm believe to be suitable for simplicity of comparison. However, there is no guarantee future volatility or performance will be either less than, equal to, or greater than the volatility or performance experienced in the Dow Jones Industrials although the firm invests with an eye on reduced volatility vs. the Dow Jones Industrials Index. 6. Durable Opportunties invests in companies firm believes to possess a Durable Competitive Advantage. Such companies are likely to be around for decades, easing the concern of principal return. DCA companies often suffer less in bear markets and usually lead recoveries. These companies allow ACI to build portfolios with minimum expected returns that may be in the mid-single digit range over any 3-5 year period which may provide long term stability partnered with long term growth in equity. There are no guarantees the strategy will be successful in this endeavor.
6. The Durable Opportunities portfolios also differ from the benchmark comparison in that Durable Opportunities reduce investment by hedging or raising cash during recessionary economic periods while Dow Jones Industrial Index reflects 100% investment at all times regardless of economic or market conditions. Firm believes this will better protect capital vs. model but is materially different than staying invested in all market conditions. This action may cause the Durable Opportunities portfolio to experience reduced participation in markets that continue to move up despite Advisors reduction in investment.
7. Advisor clients have experienced results that have lagged the performance of the benchmark to date. This lag is due to a number of factors, primarily the fact that the current high valuation investing environment has made it difficult to identify companies that fit the parameters of Durable Opportunities at a desirable valuation level. Different clients allocate different dollar amounts to Durable Opportunities at different times, which has also impacted the performance of the overall portfolio.

Full Cycle Portfolio
1. The performance of the broad market over the same time periods is included for both model and live portfolio to help investors understand market conditions present during the period examined by the model and during live investment.
2. Model is a historical back test and includes brokerage and fund fees but does NOT include Advisor Management fees which vary by account size, but in general reduce annual performance by approximately 1.5%. Live portfolio results include all fees, including Advisor Management fees.
Historical back-test means the model portfolio has been tracked on a backwards looking basis prior to the beginning of live investments in order to establish historical risks and results for investment in this portfolio. Back testing has certain inherent limitations as detailed in item #7 below.
3. Model results reflect regular investment of dividends or other earnings. Actual results reflect limited reinvestment of dividends and other earnings.
4. Investing involves risk, including risk of loss and/or principle. While the back tested Full Cycle Portfolio model has historically shown desirable performance versus the S&P 500 on a risk adjusted basis, there is no guarantee that will continue into the future. Full Cycle Portfolio is designed to provide reasonable returns for the same or less risk than the broad market on a risk adjusted basis in all phases of the economic cycle by holding risk weighted non-correlated assets, and while the firm believes model portfolios are capable of continued outperformance on this basis, there is no guarantee they will do so in the future. Comparisons with the S&P 500 are included to help the average investor understand how an investment in the Full Cycle Portfolio may differ from investment in an index fund such as an S&P 500 index fund.
5. The model for the Full Cycle Portfolio is built of diversified, liquid sector and index securities, most frequently low cost ETFs and low cost funds. The live Full Cycle portfolio does not follow the Full Cycle model exactly – variances in investor contributions & withdrawals result in measurable drift from the model. Over time, client accounts come closer in line with the Full Cycle model.
Full Cycle live portfolios may differ from the Full Cycle model in an additional material way; when valuations on certain sectors become overly stretched versus their historical average valuations, the Advisor may reduce exposure to those sectors in favor of a comparable position which is priced in a more reasonable range in comparison to it’s typical historical valuation.
These factors may result in greater or less than model performance over time.
Benchmark and index comparisons are made on a best available basis – meaning that both the index model and live performance are compared with market and other benchmarks the
firm believes to be suitable for simplicity of comparison. However, there is no guarantee future volatility or performance will be either less than, equal to, or greater than the volatility or performance experienced in the model or the S&P 500 although the firm invests with an eye on reduced volatility vs. the S&P 500.
6. Full Cycle invests in diversified components of the global financial markets and broad economy by balancing risks with non-correlating or reduced correlation assets in opposition to one another each of which is designed to prosper in some phase of the economic cycle and intended to offset reduced or poor performance in other portfolio holdings.
7. The Full Cycle model results do not represent actual trading or investment and do not reflect any impact that material economic or market factors may have had on the advisors decision making if advisor had been managing live money during the period the model covers, including transaction, fund, or management fees as detailed above in item #2.
8. Full Cycle live portfolios also differ from the Full Cycle model in that the live portfolio may be rebalanced more or less frequently depending on prevailing market conditions. While firm believes this difference positions portfolio for improved risk adjusted performance, it is not clear that this difference results in clear over or under performance versus the Full Cycle model.
9. Advisor clients have experienced results that slightly outperform the performance of the model to date. This outperformance may or may not persist. In general, the longer a client has been fully allocated to the Full Cycle portfolio, the closer it is to model performance.

Fixed Income Portfolio
1. The performance of the broad bond markets over the same time periods is included to help investors understand market conditions present during the period covered by live investment.
2. Listed comparison Index graphs and statistics do NOT include transaction, fund or Advisor Management fees. Live portfolio results include all fees, including Advisor Management fees.
3. Actual results reflect limited reinvestment of dividends and other earnings, but do not reflect the impact of any applicable taxes which vary by investor and account type (deferred account vs. taxable, etc.).
4. Investing involves risk, including risk of loss and/or principle. While the closest benchmark for Fixed Income has historically shown reduced volatility and reasonable performance versus many classes of fixed income investments, there is no guarantee that Fixed Income that will continue such performance into the future. Market Momentum is designed to provide reasonable returns for less risk than the broad market on a risk adjusted basis, and while the firm believes the portfolio is capable of outperformance on this basis, there is no guarantee it will do so. Comparisons with US Aggregate Bond Market and PIMCO Total Return are included to help the average investor understand how an investment in Fixed Income may differ from investment in an alternative index or fixed income fund.
5. The closest benchmark for Fixed Income is the Pimco Total Return Fund. Fixed Income differs in key ways from BOND – including selection of underlying investments and reduced diversification. Benchmark comparisons are made on a best available basis – meaning that live performance is believed to be compared with the closest possible benchmark for simplicity of comparison. However, there is no guarantee future volatility and performance will be either less than, equal to, or greater than the volatility and performance experienced by the benchmark although the firm invests with an eye on out performance.
6. The benchmark may include securities not contained in Fixed Income, and vice versa. Fixed Income currently holds significantly more cash than PIMCO Total Return Fund, a situation likely to continue in the near future. This action may cause Fixed Income to have reduced participation in markets that move up despite Advisors reduction in investment.
7. Advisor clients have experienced results that lag the performance of the benchmarks to date. There is no guarantee Fixed Income will continue to outperform benchmarks in the future regardless of Advisor efforts to do so.

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