 Okay, let's see. Good morning everybody on the west coast here on the east coast that is good afternoon. I thank everyone for spending their time with us today as we go over a beginner's guide to investing. What I want to do is share my screen with everyone. What I'll do is I will give you a little feedback of myself. I've been a wealth manager for about 28 years, retired about two years ago, and find it a lot more beneficial appealing to give information to wonderful librarians like Doreen, and to work with library patrons like yourself. I'm giving them a fantastic informational database for finances across the board. Today we're going to be going over a beginner's guide to investing. Okay, and with the beginners guide to investing will be going into how you might want to venture into the do's and don'ts of investing, and really some of the pitfalls that you may fall into as well. I just kindly ask everybody to hold on to questions till the end. We'll try to answer as many questions as possible, and hopefully throughout the presentation we have an opportunity to have your questions answered simply by the presentation itself. So, what I'm going to do is I'm going to just go straight ahead and we'll get we'll get started. I'm sorry to interrupt Tom but there's a little bit of background noise is there maybe a fan or a window open. Is that better. Well hopefully I don't hear anything so I think it does it sound a lot better now. It sounds good to me. Okay, awesome. So, let's go ahead and let's. I'm here at the basics of investing. This is a beginner's guide to investing. And I believe you had a great opportunity to see how to go into the San Francisco public library to access wise financial ratings. The first thing you want to do as an investor is you want to set your goals. That's the best way to set your goals to grow your money. You want to earn higher returns. A lot of people want to say for retirement maybe some people don't want to start a business. For anyone who has children. Child's education is tremendous. And it's a big goal for everybody I know that I just had a son who just graduated from college and I have a daughter that's in college right now so child education very important. That's the best way to set your goals versus return. Higher risk equates to potential higher returns or higher losses. Not everybody holds the same risk and return ratio. I'm sorry Tom also we can't see your slides. You cannot see that okay I have this slide shared. Hold on one moment. Let's see here. Yeah I could always go back. Let's see here. I think you have to allow me you're not you have to allow me to be able to share the screen I can't. Oh, yeah I can. Okay, you are a co host. So you should be able to. So. This is, and I'm already in and it's asking me to launch the meeting, which we were on this before but I am unable to to control anything, and I would you know what I'm going to do I'm going to make you a host. Okay. All right, so. Awesome. Thank you. Yes. Sorry everybody thanks for bearing with us but the only thing is when we're done you have to end the meeting, because you'll be the host. No worries. Thank you. All right, is that better. It still is not allowing me. Can you see my screens. I see you I don't see your screen. Okay so it's not allowing me to share. So that would be that that would be on unbeneficial. Okay. Everyone just give us a minute we'll figure this out. Hello. I was just on before and I was able to share. Somehow, it stopped. I wonder if there's a work around. You could maybe send the slides to me. Yeah, let's do this. Doreen what's your email address. Hey it's my first name dot last name at SFPL.org. Doreen dot your last name. I'll direct message you. Okay. If you see it. It's in the chat. I do not have access to the chat. I see that's the issue. I'm not seeing anything here at at all. Okay. Something's really gone haywire. All right. Let me put a message in the chat for everyone. Okay. Okay. There's a suggestion that you log out and log in again. You want to try that. Yeah, I'm going to wind up doing that. Okay. And can you make me a co-host again before you log out. Okay. Okay. Yeah. Yeah. I guess we can do it. So go ahead and log out and we'll log back in and start over. And we'll just, the guests are still here. So everyone. Thank you for being patient. Now I see everybody here. So now I can go ahead and I can share my screen. You want me to go ahead and make you the host again. Sorry, I was on mute. So. I can go ahead. I'm okay. Okay. Okay. I'm going to go ahead. Host disabled. Participant screen sharing. So that's why you weren't able to see my screen. Okay. So now I'm going to. There. Okay. Okay. Now see if you can do it. Yay. Okay. All right, everyone. I will go quiet now. Okay. I thank everybody for their patience. Hopefully I'm going to actually rewind and go back. Where we started before because I think it's also important that we have a visual on what we're going. I just want to make sure that everybody can actually see the screen now. It can, can everyone see the screen? Yes. Awesome. Alrighty. So the first thing we want to do as an investor is we want to set goals. We want to set goals so we can grow our money. We can earn higher returns. We want to save for retirement. Maybe we might want to start a business. Save for your child's education. I had made mention before I just had a son who graduated from college and I have a daughter that's in college. Really important that we set those funds aside and start saving for our college education because it is starting to get a lot more costly as time goes on. So it's really important that we take advantage of a lot of these vehicles that we have that, you know, or tax advantages for saving for child's education. Risk versus return. Higher risk equates to a potential higher return. And higher losses. So again, the greater the risk we take, the better the reward. The least risk we take. The lower the reward. That's way to do all of the above is diversify your assets and your industries. Some people. Would also consider industries as sectors of the market. Don't buy all bank stock. Buy in a store and assorted industries or assorted. Sectors of the market. Don't put all your investments in stock. Go with mutual funds or other options as well. The reason why we say that is when you buy one particular company, if that one particular company is affected by the overall market or the overall environment, your portfolio will be a have a direct reflection on that. However, mutual funds are a pool of investments of different companies anywhere from 50 to 200, which will help alleviate some of the risk in the portfolio. You want to invest for the long term. You'll experience ups and you'll experience downs. Riding the downs usually out, you know, usually out numbers and pays off in the long run. Chase. In the market never, never pans out for anybody. Anybody who has said that they've been able to play the market. Usually winds up on the, on the losing end. Tom, the slides are not advancing. I'm sorry to keep bothering you. Cause they're, they're advancing on my side. Oh no. Okay. Oh my goodness. Let me see if. So none of these are advancing. Let me try this. So you, can you see my screens now? I can see that. Yes. Can you see the screen now? I just see the first slide. So I'm not seeing. Go to a. The next slide. Oh. Okay. So. Yeah, this should not. Yeah, this should not be happening like this. Yeah, I've never had these problems. Neither. Neither have I to be honest with you. You know what? Give me two moments. I'm actually going to call my resident sharp shooter in here. Who knows every and anything. About this. So just give me one moment. I'm just going to mute myself for a moment here. Okay. Okay. Thanks for your patience. We'll get it. And we will email the slides to everyone. So you will get copies of the slides. I'm just sorry that. That we're having trouble getting started. Can everybody see this now? Yes. All right. So everyone can see it says invest for the longterm. Yes. I told you my resident sharp shooter would get it done. Everyone's been really cool about this in the chat. All right. Let's do this now. And feel free to talk a little longer since we lost about. 10 minutes there. So, you know, take it away. Absolutely. So, you know, we want to invest for the long term. You know, you'll experience up and downs. Riding the downs usually pays off in the long run. And usually people who try to play the market or chase the market, they'll be doing that for their entire investment career. It's so very few and far between. That an investor knows how to time the market the most. The most appropriate way. So. I really stay. Time tested with riding the downs. And just diversify within the market. Time tested with riding the downs. And just diversify within and across all of the asset classes. Manager portfolio manager portfolio for action as needed. Reinvest your earnings and keep your portfolio balanced with diversity. As I mentioned before. Create a watch list on a vice financial ratings website. And you'll get email alerts when your stocks or mutual funds are upgraded or downgraded. And you'll get email alerts when your stocks or mutual funds are upgraded or downgraded. Now, normally at this segment, I would simply go over to the vice financial ratings page. However, I do not want to buck the trend. Everybody sees what's going on. And I want to stick with it. I'm sure that if you have the opportunity, you have a great reference. Librarian in Doreen. If you have any questions, she'll show you how to go in and talk to the vice financial ratings page. And you'll be able to go in and talk to the vice financial ratings page in our everyday lives. And to be able to go in and set up a watch list. Whenever the market moves up or down in your particular portfolio, to get that email, that email alert certainly is very helpful. Fees, you always have to watch out for fees. You got to watch your fees. Be sure they align with your investment strategy. They align with your expenses, investment fees, front-end loads, back-end loads, custodial fees, and 12B1 fees. Now, when we talk about management fees, front-end loads, back-end loads, custodial fees, and 12B1 fees, those are typically all associated with mutual funds or exchange traded funds. Taxes, keep your tax accountant informed and take advantage of tax-free options, which we'll note later on in the presentation. Here's our investment vehicles. Money market accounts, savings accounts, certificates of deposit, college-saving 529 accounts, and of course, traditional and Roth IRAs. All interest-bearing low-risk products, college-savings, 529 plans, and IRAs, they offer tax advantages and tax benefits. Money market accounts typically have higher interest rates than savings accounts. You can write a limited number of checks per month. Most have higher minimum balance requirements and maintenance fees. Savings accounts typically have no minimum balance requirements, but still only allow minimum amount of transactions per month without paying any fees. Certificates of deposits, better yet known as CDs, they offer you a higher interest rate. In some cases, if you leave a lump sum deposit with the bank untouched for a fixed period of time, you typically get a nice return at the end of the time frame of the CD. College-savings 529 plans, they allow you to save for the future educational costs and prepay tuition plan or an educational savings plan. Most states offer tax benefits for contributions to a 529 plan. Withdrawals that are made for qualifying educational expenses are not subject to state or federal income tax. Now, a lot of those educational, qualifying educational programs, they could be like an APEX technical institute. They could be a high school, a private high school. All of those fall in line for qualifying educational expenses. So you don't necessarily need to use that 529 plan for college savings, but for higher education as well, including high school and some even parochial school. If withdrawals is made for non-qualifying educational expenses, those withdrawals will be subject to state and federal income tax and additional tax penalties. So you'll always want to check with your accountant to make sure that the withdrawals for the educational system that you're looking to fund has those tax benefits to it. Traditional IRA, Individual Retirement Account is a retirement account that allows you to grow your earnings tax deferred. It allows you to reduce your taxable income now. Taxes are paid when you withdraw your funds after retirement. Early withdrawals are taxed at a... and they're taxed and they're... are changed at 10% penalty. It's charged, not changed, and I apologize for that typo. You can contribute 6,000 per year in 2022 or 7,000 per year if you're 50 or older. Everyone can open and contribute to a traditional IRA, but your contribution may not be fully tax deductible if you meet certain income requirements. Roth IRA is another type of tax-advantaged retirement savings account. You can fund a Roth IRA with after-tax dollars and the contributions are not tax deductible. But when you withdraw the funds, you do so tax-free. You can contribute 6,000 per year in 2022 or 7,000 per year if you're 50 or older. A Roth IRA is a good choice if you will likely be paying a higher tax rate in retirement than you are now. You cannot qualify for a Roth IRA if you have an annual income of more than $144,000. 401Ks, most of the time 401Ks are employer-sponsored. Often employers match your contributions to a set percentage. If your employer offers a match, try to invest as much as you can up to the percentage that they'll match to take advantage of that free money. Contributions are pre-tax and deducted from your paycheck lowering your adjusted overall gross income and your tax bill. Employees are limited to $20,500 in employee contributions in 2022. Employees that are over 50 are also allowed a catch-up bonus of $6,500 in 2022. Stocks. When you buy shares of a stock, you are purchasing a piece of ownership or equity in a company. For example, if you purchase 100 shares of XYZ company and they issued 10,000 shares, then you effectively own 1% of XYZ company. Your investment risk is that the market value of your share drops below the price you paid and that's the investment risk. While performing companies are likely to grow and your stock values are likely to increase, new or poor performing companies may result in losses. Bonds. Bonds represent debt to a company or a government entity selling bonds. As an investor, you are lending them your money with the expectation of a return. Interest is paid periodically in accordance with the contract. The principal is returned at maturity. A defined date in the contract. So again, all bonds have an expiration. They have a maturity date. And once that bond matures, the promise is that you'll receive your principal in full. Your investment risk is that the entity who sold the bond does not default and you don't lose both any principal and or interest. Mutual funds. We spoke about mutual funds earlier on as a great way to diversify a portfolio. Mutual funds are a basket of assorted products, stocks and bonds. Most funds are already well diversified. You are paid a portion of the income made by the fund itself. The risk is that the fund fails to perform well. The diversity inside that mutual fund makes it less likely for that to take place. Annuities. Annuities are insurance related products. You give your investments to the insurer and they promise you a certain rate of return for as long as you live. You can purchase them with either monthly payments or a single lump sum payment. The insurer disperses payments to you on a set schedule defined in the contract. Depending on the terms of the purchase, you can receive these payments. You may also name a beneficiary who would benefit in the event of a passing or your death. With fixed annuities, you're guaranteed the same payout, each pay period. With a variable annuity, your payments will fluctuate depending upon the stock market and other factors. Examine your risk tolerance carefully before considering a variable annuity. Variable annuities tend to have higher fees and surrender charges if you withdraw your money early. Commodities. Commodities are things like precious metals, gold, silver, which typically perform better in a declining market. Agricultural, wheat, corn, beef, soybeans, and right now we certainly see energy, gas, heat, oil, electric. They all play a vital role in the market as well, and right now energy costs are soaring, so obviously those portfolios are doing well. Hedge funds. Hedge funds at high risk usually require a higher dollar investment. A combination of money from multiple investors get pulled into these hedge funds. Again, hedge funds usually require a much larger investment to begin. The risk is also a lot greater. Savings bonds. They're issued by the Treasury Department at thetreasuredirect.gov. They are considered low risk. You can earn interest for up to 30 years. They're tax beneficial. You pay no state or local taxes on the interest. You pay federal taxes on the interest when you cash in the bond or when it matures. There are additional tax benefits if savings bonds are used for qualifying educational expenses. You can buy up to $10,000 in savings bonds per year. The risk pyramid. We've talked a lot about risk and reward. Obviously the higher the risk, the greater the reward, the lower the risk, the least amount of reward. You can win big, but you could also lose big with risky investments. The higher risk, obviously the features, the futures, options, and other derivatives. Speculative stocks and mutual funds, low rated bonds, mining, precious metals, those are all considered higher risk investments. Moderate risk, growth stocks, small cap companies, medium rated corporate bonds and municipal and zero coupon bonds, mutual funds and rental real estate. A lot of people don't really categorize rental properties as investments. They most certainly are. Limited risk, blue chip stocks, high rated corporate municipal and zero coupon bonds, conservative mutual funds, US Treasury bonds and US Treasury notes. And of course the lower risk, we've talked about that earlier on in a presentation, savings accounts, money market accounts, savings accounts, money market accounts and funds, CDs, fixed annuities and cash all carry relatively low risk. 110,000 in savings account at a rate below inflation will be safe, but will lose value over time. So again, although we may turn around and put 10,000 into a savings account, typically it doesn't outpace inflation and therefore we wind up losing money over time. How do we get started? Educate yourself, knowledge is power. Right here at Weiss financial ratings, if you go in, especially in our financial literacy suite, there's a whole vast amount of tools to educate yourself so that when you educate yourself, you're making the most appropriate decisions that are ripe for you. Hire a financial advisor if you're new to investing. You have to understand the risks and the benefits of investing. Decide what to invest in that will help you best meet your goals. Again, what might be ripe for one investor may not be ripe for the next. Open a brokerage account. There are various types of brokerage accounts. You have full service brokers that offer investment management, experienced advice, research, retirement planning, tax advice and more. You'll pay fees and commissions for those services though. Then you have your discount and online brokers who offer low-cost trades, but you're in charge of managing your own picks and your own trades. You'll pay an extra fee if you want help from a broker at one of those discount or online brokerage houses. You absolutely have to fund your account, can't buy anything without funds, and you got to keep growing your investment portfolio. Let's look at some numbers. Stocks. Earnings should be growing year to year. No need for drastic jumps. Nice steady movement. Consistent small jumps are a good indicator. Earnings per share. This is the company's net income or earnings divided by the total number of outstanding shares. Example. Earnings of $50,000 on 10,000 shares outstanding is $5 earnings per share. Long-term stability. Trend line should move in a general upward pattern. The economy will play a role, but again, you want long-term upward momentum. Very similar to the chart you see right here next to the dollar sign. That's a big jump and that's a big movement north. If we could see that fantastic, but remember with that type of movement comes a certain amount of risk that we take in the market. And risk and reward need to play a vital role in our investment lifetime. The industry. Is the industry one that'll be an ongoing concern? Technology, for example, can be outdated very quickly. Apple puts out an iPhone every three, four months. So does Samsung. So again, technology becomes outdated very quickly. And we need to make sure that we're investing in industries that, you know, stand a test of time. Price earnings, P.E. ratio. It's the current share price divided by the earnings per share. The higher P.E. ratios generally indicate good growth. Again, check the industry norm. You can do that all right here on the wise financial ratings. Dividends. Consistent or increasing payment of dividends is another really good indicator. It means it's a strong company. That consistently is giving. Profits back to their shareholders. And a rise in dividend and even more importantly, companies that can sustain paying the dividends is usually a really good indicator of a very strong company. Executive management. Well experienced and low turnover and executive management is always a good thing. You'll always want to take a look at how long the CEO, the COO has been a part of the organization. Again. People have been with an organization for a long period of time, usually help with the stability of the company. Risk tolerance. Risk tolerance depends on your current or long-term needs. Ask yourself this question. Are you looking for current income or long-term growth? Capital gains brings tax implications. You have short-term capital gains if you're holding on to an investment less than 12 months. And then you certainly have long-term capital gains if you're holding on to an investment longer than 12 months. The tax advantage of holding on to it longer than 12 months certainly outweighs the short-term capital gains. Is the money needed to fund a college education or you're working towards retirement? Can you tolerate a portfolio that may have extreme swings in value? Up, down, that can be nerve-racking. You can spend many sleepless nights consistently looking at the market. Are you more comfortable with the conservative investment strategy? Are you investing money that you can afford to have tucked away for many years? My typical rule of thumb is you should have at least a five-year time horizon for this money. Expense ratio. The expense ratio is basically the cost associated with owning the fund. Expenses include things like copies, portfolio management, the analyst salary, coffee, office leases, and electricity. Also, the management advisory fee and basic operating expenses. Lower is better when considering the expense ratios of a company and or a mutual fund. Turnover ratio. The turnover ratio is the percentage of the portfolio that is bought and sold each year. If it is higher than 50%, you may want to consider another fund. The analogy I'll give with that is typically if you see a turnover ratio in a mutual fund of more than 50%, that typically means the money manager is chasing return on a mutual fund to oppose to doing the fundamental research, as I would say, kicking the tires and feeling the pain before making a purchase. Most of the times when you have a portfolio that has less than a 50% turnover ratio, that means they have a money manager that has done their due diligence on the purchases inside the portfolio. Load versus no-load mutual funds. Loads or fees. Look for funds that have no-load or have loads or no-load funds. Sometimes they're called no-load transaction fees. Diversification. The more diversification and less likely one factor can negatively impact the performance of the fund. They sort of work as an equilibrium. If you're holding on to a mutual fund that has information technology and consumer staples. And let's say consumer staples are not doing so well, but the information technology is doing well. Usually they help alleviate a lot of the risk in the portfolio. Index funds. Index funds are based on indexes like the S&P 500 index, or the Dow Jones and just real average. Index funds usually are good bets with low expense ratios and they are heavily diversified. Obviously the S&P 500 is 500 of the top blue chip companies. The Dow Jones industrial average typically is 30 of the top companies in their industries. So either one of those give you a broadband of diversification of companies that have stood the test of time. International funds. International funds are generally higher costs and higher risk because value is dependent on the dollar value of the country that you're investing in. Dollar cost averaging. Really important for an investor. Dollar cost averaging is the best way to keep your risk low over the long term. Example, invest $50 each month into a mutual fund when the market is up. Your $50 buys less shares, but when the market is down, you buy more shares for the same investment. Over time, the average cost basis of your shares is longer. The average cost basis of your shares is lower. And you can build a larger stock position. Dollar cost average is probably one of the more beneficial ways to have a consistent flow of building a portfolio. The Weiss ratings database. Let's take a look. How are you going to log into the Weiss financial ratings database is you're going to simply go to the SFPL.org, which is the library. Again, like we spoke about earlier on in the presentation, you're going to navigate to their research and learn. You're going to scroll down and search for articles and database. And you're going to click on W. You'll have the Wall Street, the two tabs of Wall Street, and then right underneath you'll find the Weiss ratings. If you're logging in from home, enter your right-hand corner and enter your library card number there. Creating a watch list. As you're navigating the Weiss financial rating site, you'll be able to save companies or investments into a watch list. You'll get email alerts if a rating is ever upgraded or downgraded. And if you can ease and you can easily view the ratings of your investments in just one click. You'll see the Watch List button in Research, Results, and Investment Profiles. Click the Watch List button. It's that little star inside, which I'm going to show you in just a few moments, to add a company to your watch list. After a company is stored into your watch list, the button will turn into a check mark, like so. To view your watch list, click on the Watch List tab button in the blue navigation bar. Now what we'll do is I'll show you here. I just want to make sure. Can everyone see this right here? Doreen? Yes, we can see. Fantastic. So what we'll do is we'll go straight into stocks here in the Weiss financial rating database here. And the stock of the day is Franco-Nevada operation. Just like so you have the star right there. If we clicked on that star, there's the check. And we simply pull down our recently added. And there is our watch list. Now every patron will be able to go in and set up their own personal profile. You'll be able to input your email address. Always remember Weiss financial ratings does not collect information for any purpose other than the watch list or emailing you a Metagap report. If I wanted to simply have this removed from my watch list, simply go and I uncheck the box. And now my watch list is empty. Here's some more information. Popular financial advisors. We have Edward Jones, the advisor group. RBC wealth management. Morgan Stanley. Charles Schwab. UBS wealth management Americas. A Mera prize. Fidelity investments. Raymond James. And Wells Fargo. Finding more information. Go to investors.gov. There's the link there. And you'll all be all be provided with these slides. And if you don't feel the necessity to rush and write things down, you'll get a copy of this from Doreen shortly. The SEC beginner's guide to investing is another great source for education. And of course, to me, always the go to Weiss financial ratings online. Now what I would like to do. Is show you very quickly. Where you can find more resources. For example, the financial literacy tool, the financial literacy tool up top. You have financial literacy basics planning for the future. And this is usually the fourth one down, which is how to become an investor. We click on how to become an investor. And we have all of these wonderful PDF books. What is investing brokerage firms. Financial advisors. All about investment fees. And these are our alternative investments. Now some would say I skipped one. To me, this is the most important book in our financial literacy suite for investors. What type of investor are you? I just want to be able to show you the content of this book and show you just how easy and information. Packed these books actually are different types of investor. What is risk? How to determine your risk tolerance. Everybody's risk tolerance is different from everybody else's. I may have been saving in retirement a lot longer than others have. I may have more put away. So for me, when a particular company, and I'm going to use a hypothetical here. This is not a recommendation, but a hypothetical. Apple. I may own a certain amount of shares of Apple. You may own the same shares. You may have a certain amount of money in retirement. And if Apple winds up taking a hit, it may only equate to about 5% of my portfolio. So in general, if Apple decides to slide in value, it's not going to greatly affect my overall portfolio. But for somebody who maybe does not have as large of a portfolio, but yet now they're holding on to 15 to 20% of their portfolio is an Apple that could have a devastating effect to somebody's portfolio. So that's what I'm going to talk about. I'm going to talk about how to determine investments, especially in a retirement portfolio. So you definitely, this is probably one of the better portions of this book to go into is how to determine your overall risk tolerance. Again, you had the different types of risk. Different types of stock market risk. The concepts of risk. How do you manage risk? So I'm going to go ahead and I'm going to stop sharing. Okay. And we can probably enter in the. The portion here where I'll answer any questions that you may have. So I'm going to go ahead and I'm going to. I would.