Notes From Todd

Todd Ehret, Founder and CEO

What is your exit strategy…
Do you have one?

It is good advice to have a clear plan for getting out of something… anything, before you get too far into it. This is particularly true of an investment. The BEFORE getting in part is what catches most people up. The truth is most investors are so anxious to hear how they may get unrealistically high rates of return that they do not consider the risk they may be taking on to get those higher rates, or more importantly, how difficult it may be to recover their original investment should future conditions dictate. It is not only advisable to plan for full liquidation of the entire investment account, but the plan should also include simple strategies to liquidate individual sub accounts, or even particular assets classes if they are not “behaving”. Jo Frost on the popular television show “Super Nanny” sometimes uses the “naughty chair” for misbehaving children. Does your plan automatically move your “misbehaving” assets classes to the proverbial “naughty chair” (cash) until they regain their composure?

Let me ask you this: Is the amount of money that you need to gain just to get back to even unrealistic due to the
recent market crash? Keep in mind, you’ll need to gain 100% on your assets if you were unlucky to have lost 50% of your holdings, but only 12% if you were lucky to have had a very conservative market account, only losing 10%.

Cornerstone Financial Resources utilizes the services of Sawtooth Asset Management. Sawtooth can perform like some of the more aggressive portfolios in the market, while taking a much more conservative overall approach. Sawtooth watches each asset class daily and places ill performing classes into cash (think time-out) in an effort to avoid large drawdowns.

Perhaps, if your current plan is not performing like you now know that it can, it would be good to contact our office to get more information on our preferred asset management strategy. If a more conservative overall approach is
right for you, Sawtooth may be your ticket.

All my best,
Todd