An Insider’s Look- What You Need to Know Presented by: David S. Richmond, CLU, ChFC Chairman &...

An Insider’s Look-An Insider’s Look-What You Need to KnowWhat You Need to Know

Presented by:Presented by:

David S. Richmond, CLU, ChFCDavid S. Richmond, CLU, ChFCChairman & Chief Investment OfficerChairman & Chief Investment Officer

Matthew J. Curfman, CFPMatthew J. Curfman, CFP®®Senior Vice President of Investment ServicesSenior Vice President of Investment Services

Presents…

Securities offered through Sammons Securities Company, LLC Member FINRA/SIPC

DisclosuresDisclosures

David Richmond is a licensed Investment Advisor David Richmond is a licensed Investment Advisor Representative in the states of MI, OH, AZ, CO, MNRepresentative in the states of MI, OH, AZ, CO, MN

Licensed to sell securities, annuities, & insuranceLicensed to sell securities, annuities, & insurance Affiliated with Sammons Securities Co.®, LLC, Affiliated with Sammons Securities Co.®, LLC,

member FINRA/SIPC & Midland Nationalmember FINRA/SIPC & Midland National Richmond Brothers Financial Management Specialists, Richmond Brothers Financial Management Specialists,

Inc. offers securities through Sammons Securities Inc. offers securities through Sammons Securities Co.®, LLC, member FINRA/SIPCCo.®, LLC, member FINRA/SIPC

Fee-based investment advisory services offered Fee-based investment advisory services offered through Sigma Planning Corporation, a registered through Sigma Planning Corporation, a registered investment advisorinvestment advisor

Richmond Brothers offers securities through Sammons Richmond Brothers offers securities through Sammons Securities Co.®, LLC, member FINRA/SIPC. The Securities Co.®, LLC, member FINRA/SIPC. The broker/dealer for Midland National’s variable products broker/dealer for Midland National’s variable products is Sammons Securities Co. Sammons Securities Co. is is Sammons Securities Co. Sammons Securities Co. is a registered broker/dealer under the Securities a registered broker/dealer under the Securities Exchange Act of 1934. Sammons Securities Co. is an Exchange Act of 1934. Sammons Securities Co. is an indirect wholly owned subsidiary of Sammons indirect wholly owned subsidiary of Sammons Enterprises, Inc., of Dallas, Texas, the ultimate parent Enterprises, Inc., of Dallas, Texas, the ultimate parent company of Midland National.company of Midland National.


This is not intended to be a sales seminar. The This is not intended to be a sales seminar. The purpose of this Webinar is to provide you with general purpose of this Webinar is to provide you with general information on current economic happenings, information on current economic happenings, government programs and investment strategiesgovernment programs and investment strategies

There will be an opportunity to schedule an There will be an opportunity to schedule an appointment for an individual consultation at the end appointment for an individual consultation at the end of this Webinar which may result in a recommendation of this Webinar which may result in a recommendation of specific financial products that may help you of specific financial products that may help you achieve your financial goalsachieve your financial goals

There is no obligation to schedule an appointment or There is no obligation to schedule an appointment or purchase a productpurchase a product


AgendaAgenda

Using GoToWebinarUsing GoToWebinar Review of 1Review of 1stst Quarter 2009 Quarter 2009 Cash flow vs. AppreciationCash flow vs. Appreciation Hot Ideas for 2009Hot Ideas for 2009 Government Programs You’ve Government Programs You’ve

Wondered AboutWondered About Q&AQ&A

Review: Using GoToWebinarReview: Using GoToWebinar

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11stst Quarter Review Quarter Review

% Change 1Q 2009 2008

DJIA -13.30 -33.84

NASDAQ -3.07 -40.54

S&P 500 -11.67 -38.49

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

Source: http://online.wsj.com [3/31/09]

% Change March 1Q 2009

DJIA +7.73 -13.30

NASDAQ +10.94 -3.07

S&P 500 +8.54 -11.67


Signs that economy Signs that economy may be starting to may be starting to bottom:bottom:

Source: http://money.cnn.com/2009/04/16/news/economy/jobless_claims/?postversion=2009041609

[4/16/09]

Week Jobless Claims11-Apr 610,000

4-Apr 663,00028-Mar 674,000

New Lows MadeNYSE NASDAQ

10-Oct-08 2901 87920-Nov-08 1894 115820-Feb-09 555 391

Source: http://www.marketoracle.co.uk/Article9019.html

Note: It is not possible to invest directly in an index.


Signs that economy may be starting to bottom:Signs that economy may be starting to bottom:

Source: http://forbes.com/feeds/afx/2009/04/02/afx6247597.html [4/2/09]

February 2009U.S. Factory Orders 1.8%Durable Goods Orders 3.5%Computers/Electronics 7.3%Machinery Orders 12.7%

“The initial scare has gone from the market and it looks like the economy is showing signs of bottoming out, but it is difficult to predict where things will go from here.”

– Jack Welch, Former CEO of General Electric

Source: http://www.cnbc.com/id/30242912 [4/16/09]


% Change 1Q 2009 2008

DJIA -13.30 -33.84

NASDAQ -3.07 -40.54

S&P 500 -11.67 -38.49

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

Source: http://online.wsj.com [3/31/09]

% Change March 1Q 2009

DJIA +7.73 -13.30

NASDAQ +10.94 -3.07

S&P 500 +8.54 -11.67


Monetary PolicyMonetary Policy

Source: http://www.freddiemac.com/pmms/release.html

The National Mortgage Rate SnapshotOne Year Ago One Week Ago30-YR 15-YR 5/1-YR 1-YR ARM 30-YR 15-YR 5/1-YR 1-YR ARM

Average 5.88 5.42 5.56 5.18 4.78 4.52 4.92 4.75Fees & Points 0.4 0.4 0.6 0.7 0.7 0.7 0.7 0.6Margin N/A N/A 2.76 2.74 N/A N/A 2.74 2.76

Primary Mortgage Market Survey Results April 9, 2009


Monetary PolicyMonetary Policy

Source: http://online.wsj.com/mdc/public/page/2_3021-forex-20090331.html?mod=mdc_pastcalendar

US$ v. % CHG YTDEuro 5.1%Yen 9.1%Pound 1.7%


CommoditiesCommodities– Making a recoveryMaking a recovery

Sources:

1http://bloomberg.com/apps/news?pid=20601081&sid=aOXM9_FZjRFg&refer=australia [3/31/09]

2http://online.wsj.com/article/SB123855153156576671.html?mod=googlenews_wsj[4/1/09] 3http://google.com/hostednews/ap/article/ALeqM5jND4r3B-VBZu2Ogg2_yzjYnPIP8gD95DVGB80[1/1/09]

Commodity Year End 2008 1st Quarter 2009Oil -53.5% 11.0%Silver -35.6% 15.0%Gold 5.4% 4.6%

Cash Flow vs. AppreciationCash Flow vs. Appreciation

Richmond Brothers believes cash flow is the most Richmond Brothers believes cash flow is the most important thing in your portfolio, especially in bad important thing in your portfolio, especially in bad timestimes

Cash flow may help lessen loss in a portfolioCash flow may help lessen loss in a portfolio– However, it does not guarantee against lossHowever, it does not guarantee against loss

Principle: Get as much of draw as possible from Principle: Get as much of draw as possible from cash flow and leave as much of principal intact cash flow and leave as much of principal intact for potential future recoveryfor potential future recovery

What to Look for in 2009What to Look for in 2009

Ensure cash flow is intact as much as possibleEnsure cash flow is intact as much as possible– Companies will adapt throughout yearCompanies will adapt throughout year

Dollar cost average when possibleDollar cost average when possible– Take advantage of low pricesTake advantage of low prices– Remember: dollar cost averaging does not ensure a Remember: dollar cost averaging does not ensure a

profit nor does it protect against a loss in declining profit nor does it protect against a loss in declining markets. It involves continuous investment in securities markets. It involves continuous investment in securities regardless of fluctuating price levels. Investors should regardless of fluctuating price levels. Investors should consider their ability to continue purchases in periods of consider their ability to continue purchases in periods of higher prices.higher prices.

Watch for inflationWatch for inflation– Hedges: real estate, stocks, goldHedges: real estate, stocks, gold

What to Own in 2009What to Own in 2009

Unfortunately, we cannot make Unfortunately, we cannot make recommendations in a group settingrecommendations in a group setting

Please contact Richmond Brothers for Please contact Richmond Brothers for an individual recommendationan individual recommendation

Government ProgramsGovernment Programs

Two ways government has stepped Two ways government has stepped in:in:1. Federal Reserve1. Federal Reserve

Goal: Provide liquidity in U.S. and abroadGoal: Provide liquidity in U.S. and abroad

2. Treasury Department2. Treasury Department

www.financialstability.gov www.financialstability.gov – Goal: Provide transparency to the programs under Goal: Provide transparency to the programs under

the treasury’s scopethe treasury’s scope

Source: http://www.newyorkfed.org/markets/talf_terms.html

Gov’t Programs: TermsGov’t Programs: Terms

Asset Guarantee Program (AGP)Asset Guarantee Program (AGP), established under section , established under section 102 of EESA, allows the Department of the Treasury assume a loss 102 of EESA, allows the Department of the Treasury assume a loss position with specified attachment and detachment points on position with specified attachment and detachment points on certain assets held by the qualifying financial institution; the set of certain assets held by the qualifying financial institution; the set of insured assets would be selected by the Treasury and its agents in insured assets would be selected by the Treasury and its agents in consultation with the financial institution receiving the guarantee. consultation with the financial institution receiving the guarantee.

Capital Assistance Program (CAP) Capital Assistance Program (CAP) is an effort to restore is an effort to restore confidence in our financial institutions and ensure that they have confidence in our financial institutions and ensure that they have the capital to continue to lend even in a more adverse the capital to continue to lend even in a more adverse environment. The supervisors are conducting stress tests of the environment. The supervisors are conducting stress tests of the nation's financial institutions to determine whether they need nation's financial institutions to determine whether they need additional capital to continue lending and absorb the potential additional capital to continue lending and absorb the potential losses that could result from a more severe decline in the losses that could result from a more severe decline in the economy than projected. Eligible financial institutions can either economy than projected. Eligible financial institutions can either raise the necessary capital in the private markets, or issue raise the necessary capital in the private markets, or issue convertible preferred stock to the government through CAP. convertible preferred stock to the government through CAP.

Source: www.financialstability.gov

Gov’t Programs: TermsGov’t Programs: Terms

Capital Purchase Program (CPP)Capital Purchase Program (CPP) is a is a voluntary voluntary program in which the program in which the U.S. Government, through the Department of Treasury, invests in preferred U.S. Government, through the Department of Treasury, invests in preferred equity securities issued by qualified financial institutions. Participation is equity securities issued by qualified financial institutions. Participation is reserved for healthy, viable institutions that are recommended by their reserved for healthy, viable institutions that are recommended by their applicable federal banking regulator. applicable federal banking regulator.

Under the Under the Consumer and Business Lending Initiative, Consumer and Business Lending Initiative, the Treasury the Treasury and the Federal Reserve are working together to provide an initial $200 and the Federal Reserve are working together to provide an initial $200 billion in financing to private investors to help unfreeze and lower interest billion in financing to private investors to help unfreeze and lower interest rates for loans for students, small business, and others. This program has rates for loans for students, small business, and others. This program has the potential to unlock up to $1 trillion of new lending and unfreeze the potential to unlock up to $1 trillion of new lending and unfreeze currently frozen credit markets. currently frozen credit markets.

The Emergency Economic Stabilization ActThe Emergency Economic Stabilization Act (EESA)(EESA) is the bill that is the bill that forms the foundation of the Financial Stability Plan. This Act provides forms the foundation of the Financial Stability Plan. This Act provides critical tools, including the Troubled Asset Relief Program (TARP), to critical tools, including the Troubled Asset Relief Program (TARP), to strengthen America's financial system. strengthen America's financial system.


Gov’t Programs: TermsGov’t Programs: Terms Systemically Significant Failing Institution Program (SSFI)Systemically Significant Failing Institution Program (SSFI) was established to provide was established to provide

stability and prevent disruptions to financial markets from the failure of institutions that are critical stability and prevent disruptions to financial markets from the failure of institutions that are critical to the functioning of the nation’s financial system.to the functioning of the nation’s financial system.

The The TALF TALF is a Federal Reserve credit facility authorized under section 13(3) of the Federal Reserve is a Federal Reserve credit facility authorized under section 13(3) of the Federal Reserve Act. The TALF is intended to make credit available to consumers and businesses on more favorable Act. The TALF is intended to make credit available to consumers and businesses on more favorable terms by facilitating the issuance of asset-backed securities (ABS) and improving the market terms by facilitating the issuance of asset-backed securities (ABS) and improving the market conditions for ABS more generally.conditions for ABS more generally.

The Federal Reserve Bank of New York (New York Fed) will make up to $200 billion of loans under The Federal Reserve Bank of New York (New York Fed) will make up to $200 billion of loans under the TALF. TALF loans will have a term of three years; will be non-recourse to the borrower; and will the TALF. TALF loans will have a term of three years; will be non-recourse to the borrower; and will be fully secured by eligible ABS. The U.S. Treasury Department will provide $20 billion of credit be fully secured by eligible ABS. The U.S. Treasury Department will provide $20 billion of credit protection to the Federal Reserve in connection with the TALF protection to the Federal Reserve in connection with the TALF

Targeted Investment Program (TIP) Targeted Investment Program (TIP) was created to stabilize the financial system by making was created to stabilize the financial system by making investments in institutions that are critical to the functioning of the financial system. This program investments in institutions that are critical to the functioning of the financial system. This program focuses on the complex relationships and reliance of institutions within the financial system. focuses on the complex relationships and reliance of institutions within the financial system. Investments made through the TIP seek to avoid significant market disruptions resulting from the Investments made through the TIP seek to avoid significant market disruptions resulting from the deterioration of one financial institution that can threaten other financial institutions and impair deterioration of one financial institution that can threaten other financial institutions and impair broader financial markets and pose a threat to the overall economy. broader financial markets and pose a threat to the overall economy.

Troubled Assets Relief Program (TARP)Troubled Assets Relief Program (TARP) was established under the EESA with the specific goal was established under the EESA with the specific goal of stabilizing the United States financial system and preventing a systemic collapse. Treasury has of stabilizing the United States financial system and preventing a systemic collapse. Treasury has established several programs under the TARP to stabilize the financial system and has now created established several programs under the TARP to stabilize the financial system and has now created the Financial Stability Program will additional measures to stabilize the financial system, restoring the Financial Stability Program will additional measures to stabilize the financial system, restoring the flow of credit to consumers and businesses. the flow of credit to consumers and businesses.


Q & A SessionQ & A Session

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Our CredentialsOur Credentials

David S. Richmond, CLU, ChFCDavid S. Richmond, CLU, ChFC– Chairman & Chief Investment OfficerChairman & Chief Investment Officer– In 2009, will graduate with Masters of Science in In 2009, will graduate with Masters of Science in

Financial ServicesFinancial Services

Matthew J. Curfman, CFPMatthew J. Curfman, CFP®®– Senior Vice President of Investment ServicesSenior Vice President of Investment Services– One of youngest to receive CFP® in the Board’s One of youngest to receive CFP® in the Board’s

historyhistory

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An Insider’s Look- What You Need to Know Presented by: David S. Richmond, CLU, ChFC Chairman &...

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