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"What's Your Investment Theory?"

Aloha!~We've not met, but I'm an Investment Advisor Representative and principal advisor for "Akamai Wealth Management, LLC" here in downtown Honolulu. My job is managing your investment/wealth (or, I can help you create it). Whether you don't have any, want to have it, or have been exceedingly successful, or, anything in between? I'm your hucklebearer. ;)

I've been in financial services for over 40 years. During that time, I was a Life, Health & Fixed Annuity guy (32 yrs), a Mutual Fund guy (series #6 -2 yrs) and a series #7 stockbroker (16 yrs). I worked extensively with Credit Unions dealing with payroll deduction financial planning "on-the-fly" for membership development, and also helping credit unions manage their reserves by investing in bond ladder strategies. I've been mortgage licensed & registered since 2012. My specialty is solving problems, and investment asset management.

For decades, I've been a huge proponent of "Alpha"-based investing in active portfolio management. Using technical analysis to spot trends and fundamental analysis to spot winners, I also traded stocks for clients who had that "taste" for a more aggressive effort of accumulating equity. For decades, this was an undisputed pathway to prosperity.

Now? I'm not so sure. (Yes), if you're under 50? a strong dollar cost averaging (DCA) strategy into a volatile Equity Traded Fund (ETF) or open ended mutual fund is still the most efficient way to take advantage of (both) up and down market cycles and grow wealth by discounting the price of shares by taking advantage of market pricing swings (corrections).
But, if you're above age 50, your timeline is shorter before retirement and that needs to be addressed differently than by using the effective DCA strategies of a younger person.

In July of 2021, Dr. Moshe Melevsky released his white paper entitled "In Defense Of Annuities". He showed with statistical data and fact how taking market risk while additionally subjecting oneself to Sequence of Returns risk, taxation, and other relevant and critical exposures was not necessary. Before you tune out because you think I'm pushing fixed annuities, Please reconsider; I'm not. I'm actually and correctly endorsing the principles of "Safe Money" investing as a contrast to market oriented and risk exposure to unstable and constantly changing markets.

What is "Safe Money"?

"Safe money" is an investment practice that limits the exposure of your investment principal to market fluctuation. In short, you reduce the risk of loss while maximizing your potential for gain. While you would be (partially) correct to presume this includes Fixed Equity Index Annuities (FEIA's) that is but one of many aspects of safe money investments (which DO have their own appropriate place in retirement income planning).

"Slow & Steady Winds the Race" said the sage AEsop in "The Tortoise & The Hare". This is imperative, as in age 55+ You simply cannot afford losses. "Losses HURT you far more than GAINS can HELP you." Avoid losses of your principal.

Why is that important? Simply, when your acount value falls from $100,000 to 75%? That's a 25% loss. If you're over 55? You've seen these losses happen several times in the past 30 years. One may believe that in order to recover, the following year growth must be 25%; in fact, NO. It requires a 33% gain to offset that 25% loss. Yes, the problem is that most of us can't do simple math to realize that (which is why having your own personal advisor is a very big deal).

But additionally, think about the past 4 market corrections we've endured. The shortest duration recovery has most recently been the 2020 March-December correction from the corona virus and the ham-handed reaction of our governement regarding how to stop a virus by scaring people to death (but,I digress - more on this later). Typical recoveries average 4-8 years. In a retirement portfolio, you continue to need income, so you'll continue to drain equity from a portfolio with depressed stock prices. If your life expectancy from 65 is 30 years (average), expecting 3 market collapses with a duration of 5 years each is the idea of you spending half of your retirement recovering, and selling off shares of your portfolio at a discount valuation to provide you a lifestyle. You didn't see your cost of living cut in half, but you DID see your portfolio drop by half, and almost overnight!

Another problem with this is how deceiving it can be. After a 1 yr loss in excess of 40%, you see the next year recover 22%! Great news, right? That's not a gain, Folks. And your broker is reluctant to point that out. That's a recovery of the prior years losses. It comforts us, and we gain confidence, but the candid unvarnished fact is that it did not need to be this way. Overwhelmingly, we stay with what we know. We are reluctant to change what we used to (during our working/accumulation years) grow our account values to these magnificent sums. But its disingenuous to not accept the fact that (with very few exceptions) NONE OF YOU did anything out of the ordinary to create these massive gains. You built this pile of money by very simply coming in every day and doing your job while allowing the Payroll department to defer a portion of your income to a pretax account that you now control. But, all you did was dedicate it. DOLLAR COST AVERAGING did all your heavy lifting, and now that you've stopped working? You're not saving any longer! You're spending! DCA works BOTH ways. It builds wealth when you contribute; it destroys wealth when you withdraw money for retirement.

To be very candid with you? You cannot manage your money in retirement in the same manner you used to create it.
This is when "Safe money" wins, is also when DCA loses.

If you think about it? There are other areas (perhaps MANY other areas) that age/life has compelled you to change the way you do things in order to continue enjoying life. I had to give up tennis because of my bad knees; I then had to give up golf because of my bad shoulders. (Hopefully, I won't need to give up sex because of a bad...well, nevermind. ;-) Changing your investment strategies is every bit as necessary. DCA cannot perform, and your notion the market will continue to glide effortlessly skyward for you is both silly and naieve.

Well, back to the Melevsky White paper...Moshe did a study that he published in 2021 that looked at the month-to-month returns of the S&P 500 from 01/01/1970 to 12/31/2020. Exactly 50 years. 600 monthly periods were measured. He considered all dividends would be reinvested. He used a DOLLAR invested on 1/1/1970, and in that 50 yr period, it compounded 180 times to reach (what I consider to be) an astonishing value of $181.00. Keep in mind this used monthly gains and losses to aggregate the value.
Moshe analyzed the data using statistical math (He is the Professor of Finance at the University of Toronto and also teaches adjunct courses at the prestigious "College of Financial Services" in Bryn Mawr, PA) and quickly recognised that there was a "bell curve" aspect to the monthly returns and it looked like this:
-15% of all monthly returns were under -2% (losses) with the worst monthly loss at -22%;
-70% of all months were returns that would be considered "modest" by most investors; -2 up to 6%;
-15% of all monthly returns were in excess of 6% up to 16% (best monthly return).

This creates two possible schools of thought;
1. Those who were interested in attaining the highest possible returns while acepting the risk of enduring the lowest losses. This group experienced turning $1.00 into $181.00 as mentioned previously.
2. The second group who said, I am willing to give up the expectation of high returns (6%+) in exchange for never suffering a loss greater than -2%. These "investors" turned that SAME DOLLAR with reinvested dividends into $529.00 vs $181.00!!!

You now see that it does make a GREAT deal of sense to take risk of losses when you're feeding the account every payday and benefitting from DCA; You can now also see that when there are no further contributions to buying into a market with DCA? All you have remaining to show for it is risk, and limited rewards.

During the loss cycle of 4-7 years of moving forward with Safe Money is overwhelmingly more valuable in maintaining your purchasing power than earning double digit returns to get your account back to its original value. The geat news with safe money is also the liquidity aspect. Most Safe Money accounts have no (or shorter) surrender charges and rival and even exceed the returns found in the FEIA programs even when considering average consulting fees.

Safe Money is the solution. Call me TODAY and schedule your free time (yes, of course I'll comp your parking! :-D )

Hawaii residents schedule a free consultation for acquiring and managing wealth, retirement and debt reduction. Questions? Text or call 808-464-5292

Wealth Management/AUM - Charitable Trust (CRUT, CRAT, LEAD/REMAINDER) Advisory Services are offered by Akamai Wealth Management, LLC an Investment Advisor in the State of Hawai'i.

Insurance products and services are offered through Akamai Retirement Concepts, LLC, an affiliated company. Mortgages and Equity Sharing/Equity Release programs (where allowed by State Statute) are originated and funded through Akamai Equity Concepts, LLC. Akamai Wealth Management, LLC and Akamai Retirement Concepts, LLC and Akamai Equity Concepts, LLC are also affiliated with AWM, but are not affiliated with or endorsed by the Social Security Administration or any government agency, and are not engaged in the practice of law.

Daniel J Turner, Principal Advisor
Akamai Wealth Management, LLC
1088 Bishop St. Executive Centre Ste 3007
Honolulu, HI 96813
808-691-9200 office
808-464-5292 direct

Advisory services are offered through “Akamai Wealth Management, LLC”. (AWM) a registered Investment Advisor registered in the State of Hawaii.

​All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current of future performance or indication of future results. Purchases are subject to suitability. This requires a review of an investor’s objective, risk tolerance, and time horizons.

Investing always involves risk and possible loss of capital.

AWM and Dan Turner ( Principal) are not attorneys or accountants and do not provide comprehensive legal or tax advice. For full disclosure of all relationships associations, affiliations, fees, charges, and capacities please request the ADV 2 A&B from Dan Turner.

Mr. Daniel J. Turner is now helping the following cities on Oahu in Hawaii with financial advice: Aiea, Ewa Beach, Hale'iwa, Hau'ula, Hawaii Kai, Honolulu, Ka'a'awa, Kahala, Kahuku, Kailua, Kaneohe, Kapolei, La'ie, Lanikai, Ma'ili, Makaha, Manoa, Mililani, Nanakuli, Pearl City, Wahiawa, Waialua, Wai'anae, Waikiki, Waimanalo, Waipahu along with all the Hawaiian islands. Text or call 808-464-5292