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Frank Polashock

Video Transcripts

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Personal and Firm Overview - Frank Polashock

[music]

Frank Polashock: Hi. I'm Frank Polashock, the founder of FXP Advisory Services. We act as fiduciaries for our clients, putting your best interests first....

[music]

Frank Polashock: Hi. I'm Frank Polashock, the founder of FXP Advisory Services. We act as fiduciaries for our clients, putting your best interests first. The firm's primary focus is to guide you to financial success.

We're different from other advisory firms in that we specialize in the management of an individual's 401(k) assets. These funds are typically one of the largest in individual loans but rarely optimizes. For instance, either because of a lack of time or interest, the individual selects a default option, such as a target date fund.

Taking the default option is not typically the best solution. The main issue of selecting a target date fund is that it can experience large declines in a prolonged bear market. Another point of differentiation is that we believe investors fare better if their assets are managed dynamically, rather than having a fixed or static asset allocation.

We monitor and analyze the state of the market in order to help investors be aggressive when the probabilities of a market advance is high and defensive when a market decline is more probable. Please watch the next two videos, as they delve into these areas in more detail.

If you're a business professional who thinks you can benefit from the assistance of a professional asset manager, please contact me through my personal email. Consultations are always complementary. Thank you.


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Managing Your 401K - Frank Polashock

[background music]

Frank Polashock: Hello. I'm Frank Polashock the owner of FXP Advisory Services. If you own a 401(k) you should take the time to...

[background music]

Frank Polashock: Hello. I'm Frank Polashock the owner of FXP Advisory Services. If you own a 401(k) you should take the time to watch this short video. There are many reasons why individuals don't maximize the return of their 401(k). More often it's their emotions that dictate their actions leading to less than optimal results.

Most people live very busy lives. They don't have the time or expertise to know what funds to pick for their 401(k). Their first impulse is to try to choose something that they can set and forget. This leads to large losses when the market goes down, which must be avoided to optimize returns.

In addition, after the initial setup, most individuals don't change their fund selection unless something bad happens. Then they act emotionally by getting out of the market and hesitate getting aggressive again. In order to maximize the return of your 401(k), you need to know the state of the market.

When the market is bullish, you need to be aggressive. When the market is bearish, you need to be defensive. We have the tool to analyze your company specific 401(k) option. This tool ranks the funds by performance, highlighting the funds that are outperforming verses underperforming in the market.

This enables us to have you invested in the highest ranking funds within your 401(k). You funded your 401(k) with hard earned dollars, intending to live comfortably in retirement. Accordingly, you should seek to maximize the return of your investments to reach this goal. This is our realm of expertise. We only act in your best interest.

We have the tools to help increase the performance of your 401(k). We even have the tools to quantify how much more you might have accumulated if you utilized our services. You have nothing to lose and potentially a lot to gain. All it takes is just a little bit of your time to find out how our services can benefit you. Thank you.


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Dynamic Asset Management - Frank Polashock

[background music]

Frank Polashock: Hi, I'm Frank Polashock, the founder of FXP Advisory Services, where our primary focus is to guide you to financial success....

[background music]

Frank Polashock: Hi, I'm Frank Polashock, the founder of FXP Advisory Services, where our primary focus is to guide you to financial success. One way we do this is through dynamic asset management.

Disaster avoidance is an imperative. It's very difficult to compensate for large portfolio losses. If your portfolio has a 10-percent loss, you only need an 11-percent gain to get back to even. It gets exponentially harder as losses increase. If you have a 20-percent loss, you need a 25-percent gain. If you have a 50-percent loss, you need a 100-percent gain.

We'll explore how the concept of dynamic asset management helps you to avoid large losses, while the implementation of static asset management fails to do so. First, let's explore what the financial service industry standard practice is for asset management.

It's to ask you a series of questions to assess your risk level, and then assign you a static asset allocation that manages your risk profile. As an illustration, we'll use the industry standard 60/40 or balanced portfolio as the static approach being implemented.

The risk management embodied in the industry standard 60/40 portfolio is found in the 40-percent bond segment, which is always present and intended to act as a buffer against the higher volatility and larger potential losses of the stock portion.

We have to ask the question, "Does the widely used 60/40 portfolio really provide the level of risk management that average investors expect it to? Does it really limit the damage, as one would expect?"

The answer is no. It really doesn't serve you well in either a bull or a bear market. It's a bit like this guy who's trying to get dressed for any and all weather conditions. Trying to be prepared for it all when, in fact, he's not adequately prepared for any.

A static portfolio isn't right for either a bull or a bear market condition. In a bear market, when risks and losses are high, risk protection is not enough. In a bull market, when risk is low, asset growth is not optimized.

The industry standard 60/40 portfolio is modeled here by using 60 percent of the most popular S&P 500 ETF, symbol SPY, and 40 percent of the most popular bond ETF, symbol AGG. The 60/40 portfolio lost almost 35 percent from the high in late 2007 to the low in early 2009. This loss far exceeds any reasonable person's expectation of a risk-managed portfolio.

In the subsequent up years, the bond allocation would have caused a drag on performance. As you can see, static asset management provides too little protection in bad markets and too much in good markets.

This is the big question, "Is it possible to identify the times when more risk management should be applied, and the time when less risk management should be applied?" At FXP Advisory Service, we believe the answer is yes, using a market condition identification method covering three timeframes -- short term, intermediate, and long term.

The sum of positive timeframes results in market conditions ranging from zero to three. As you can see in this chart, the market declines are dominated by yellow and red periods, while the market up trends are dominated by green with a smattering of yellow.

These statistics show how powerful the market condition identification system is. A market condition of three provided most of the returns during this period with a little downside, while a market condition of zero caused the most wealth destruction.

In fact, dynamic asset management is so effective that the maximum loss would have been a minor 6.77 percent, versus the 34.7-percent maximum loss through the industry standard static asset management solution. Even better, the dynamic asset management solution would have finished the whole period with a tiny loss of just negative 1.63 percent.

Dynamic asset management does better in the recovery years as well. The benefit of losing less in a bear than making more in a bull is really apparent when you add them together, since all the money lost in the bear would compound during the following up years to create a huge differential, nearly $150,000, in the amount of money an investor potentially ends up with.

In summary, with dynamic asset management, we turn a simple concept, that of carefully doing everything we can to avoid disasters, into something real. By using dynamic asset management, we at FXP Advisory Services can help investors avoid the shortfalls of standard asset management strategies while enjoying superior outcomes.

In summary, with dynamic asset management, we turn a simple concept, that of carefully doing everything we can to avoid disasters, into something real. By using dynamic asset management, we at FXP Advisory Services can help investors avoid the shortfalls of standard asset management strategies while enjoying superior outcomes.

If you're a business professional who thinks you can benefit from our services, please contact me through my personal email. Consultations are always complimentary. Thank you.

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