WORTH A REED
Third Quarter 2016
“Playing the small ball”
IN THIS ISSUE-
John May, Manager of Planning and Investments
Investors often evaluate money managers on their ability to
“outperform the market.” When I hear this, I think to myself, what
is the best way to accomplish this? Naturally as a sports nut, I immediately look for a sports translation or example.
Imagine yourself as a kid, playing baseball with all boys and girls in
the neighborhood. I know it’s hard to imagine since we never see
kids playing baseball in the streets but nevertheless pretend. Pretend you’re at home plate, down by two runs, runners on first and
second base. What do you do? You stand calmly, tap the bat at
home plate, you take your finger and point to the air, deep over
the center fielder’s head. You call your shot! Channeling your inner Babe Ruth or for the younger generation your inner “Jake Taylor” (fictional character from the Major League movie). What happens next? You strike out, ground out, or whiff the bunt (opposite
Jake Taylor) to move the runners because you are not “the Babe or
Jake Taylor” and your team loses.
The above reminiscent story is exactly what Reed Financial strives
not to do with client portfolios. Strikeout! Jim Reed learned long
ago that the way to build wealth is by “playing the small ball,” not
trying to hit home runs. That is Warren Buffet’s famous quote
“Rule #1 in investing, don’t lose money, Rule #2 don’t forget Rule
#1.” He has instilled protecting capital into his investment committee members. Our main goal with investing is helping clients
not to strikeout or “focusing portfolios on downside protection.”
Traditional money managers accomplish this by use of asset allocation or the percentage of stocks and bonds, aggressive or conservative assets respectively. At RFS, we take this several steps
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“Playing Small Ball”
Save-The-Date for Friends & Family Event
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Cyber Security at RFS
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Identity Theft
Reducing Financial Stress
further with sophisticated software, a meticulous tracking of and
managers and economic factors, market breakpoint indicators,
diversification within asset classes or “finding managers with varying perspectives and ideas when identifying companies for investment.” We tend to favor managers that have more flexibility to
move in and out of companies or at times not buy at all (hold cash)
if unfavorable market conditions are present. We find these managers by utilizing cutting edge industry software that allows us to
slice and dice manager returns for in-depth analysis. We track our
managers against peer groups (relative managers buying the same
types of assets) a minimum of three times a week or more if the
market is volatile.
We have detailed index level breakpoints that take emotion out of
the process. We set bands around the current market level by percentage points to the downside or upside which dictate moves we
will make if the thresholds are surpassed. We feel we take portfolio management to the next level, and are constantly trying to improve, just as the markets are ever evolving.
My baseball analogy dictates that simply “putting the ball in play”
would have scored a run and gave another opportunity for the next
batter. This is exactly how we hope to build wealth over time. ■
Securities offered through Comprehensive Asset Management and Servicing, Inc. (“CAMAS”), 2001 Hwy 46, Ste. 506, Parsippany, NJ 07054,
1-800-637-3211, Member FINRA/SIPC/MSRB. Reed Financial Services, Inc., is independent of CAMAS.
Cyber Security– What Does It Mean For You at RFS
Jim Reed, President
As technology continues to invade nearly all aspects of our lives, it creates many challenges for us to protect our identity and to minimize
our exposure to theft.
Many of us have had a credit card compromised or an unauthorized withdrawal from a checking account. Identity theft, while less frequent than other types of cyber thievery (when it occurs), can be larger and more difficult to fix. With the information gathered from
identity theft, we have seen fraudulent tax returns filed with large refunds paid to the thieves or simply large purchases made based on
your good credit rating reports.
RFS (by regulation) is required to maintain personal information on our clients. Accordingly, we take serious our responsibility to protect
your information. Generally, potential attacks to our system come from two sources; hackers trying to directly get into our network or
indirectly through email or websites.
While we have had a good network and monitoring system in place over the last several years, we felt an upgrade would be beneficial for
everyone. In February, we installed a new stronger system.
Hackers from around the world try nightly to get into networks everywhere. In the event it did occur, we do have contingency plans in
place to deal with the problem. Hopefully, the money we spend trying to protect our systems will be money well spent.
The biggest risk to us is incoming emails and the attachments that may be infected with a virus. We have had clients personal emails
compromised and hackers sending us emails requesting monies from the client's account be sent. Because of this, we have a policy in
place that if we receive an email request for monies from a client, we will not send it without someone from our staff verifying verbally
that this is your actual request. Incoming emails from all sources are scanned for network threats. Currently, security experts claim that
normally over 3,200 new viruses are created each and every month by thieves looking for ways to get into systems worldwide.
Clearly, the need to safeguard your personal information is a responsibility we take seriously. There is also a business threat called
“Ransomware”. If this threat is encountered, they contain very sophisticated software that freezes all your business systems and data and
essentially puts you out of business. Once that occurs, they demand payment of ransom to get your data or business back, which can be
very costly.
The cyber risk comes in many forms. The thieves are very sophisticated in their approach. In addition to hacking and hidden items in
emails, they have created emails that look legitimate from reliable sources and if opened, attack you. They now have both fictitious websites and real websites that have been infected. Trying to protect ourselves is a continual battle. Currently, we are channel our emails,
attachments and web searches through our monitoring systems to identify potential risks. Hopefully, we can keep winning the battles but
there are no guarantees.
Hackers have gotten into President Obama's email in the White House, the National Security Agency, the U.S. government's top security
organization and large corporations like Target and Home Depot. So while it is certainly possible that it can happen to any organization,
we are making it a priority to make sure our firm and clients information is as secure as possible. ■
SAVE THE DATE
Monday, December 26, 2016
RFS Friends and Family Event at
The Great Lakes Science Center
This will be an opportunity for your kids &/or
grandkids to explore the place throughout the
day. There will also be a private movie showing
starting at 5:30 in their new and improved dome
theater!
Additional details will be forthcoming.
Securities offered through Comprehensive Asset Management and Servicing, Inc. (“CAMAS”), 2001 Hwy 46, Ste. 506, Parsippany, NJ 07054,
1-800-637-3211, Member FINRA/SIPC/MSRB. Reed Financial Services, Inc., is independent of CAMAS.
3690 Orange Place Suite 240 • Beachwood, OH 44122 • (216)464-2090 • www.reed-financial.com
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Identity Theft Prevention
Mark Lisachenko, Operations Manager
All of us can take measures to prevent identity theft. As a starting point, if you currently own a home review your homeowner’s insurance policy. You may be surprised that you have some form of coverage already. If not, contact your agent as it
may be a minimal fee. Even if you have coverage contact your agent to understand
exactly what the policy does and does not cover and what the protection limits are.
Many thanks to our clients
for enjoying our social
gatherings with us!
Next, determine if a do-it-yourself approach or a protection service is right for you.
Both have pros and cons and different degrees of effectiveness.
Protection services: Protection services offer credit monitoring, identity monitoring
or both. Pricing ranges from $9 to $30 a month with. If you do choose to pay for a
service the most important thing is to truly understand what you are paying for. Are
you only paying for assistance once a theft occurs or does the service provide preventative measures as well (and what kind)? Are you covered from the financial loss
of the actual theft or just expenses from resolving the theft? Some services only
monitor one of the big three credit bureaus and they have different degrees of
‘monitoring’. The definition of what legal fees are covered is also very sketchy. Keep
in mind that creditors will not necessarily speak to a third party to resolve a credit
violation (some services may request a limited power of attorney from you to try), so
be aware the vendor will not necessarily save on your time commitment in the event
a crime occurs.
Do it yourself: Obtain one free credit report a year from each of the big three credit
reporting agencies at www.annualcreditreport.com (stagger the requests over the
course of the year for best effect). Another important weapon that is available is a
credit ‘freeze’. The freeze prevents new accounts from being opened in your name.
The freeze needs to be done with each of the big three credit bureaus and charges
vary by state (for Ohio it is $5 for each bureau for each action and for all states free if
you prove you were an identity theft victim). You can then ‘unfreeze’ a request from
a new specific creditor to open an account and then ‘re-freeze’ when finished. I
have had a freeze in place since 2012 and found it very easy to manage.
Whichever approach you choose, the best advice we have seen over and over is to
be vigilant about who you give information to and remember to treat your digital
valuables just like you would your physical assets. It’s very important to keep up to
date on the latest criminal scams.
What to do if you become a victim of Identity Theft:
 Immediately file a police report.
 Place a fraud alert on your credit report through one of the credit reporting
agencies. They are required by law to share with each other.
 Equifax – 800-525-6285 or www.equifax.com
 Experian – 888-397-3742 or www.experian.com
 TransUnion – 800-680-7289 or www.transunion.com
 Order a credit report (free at www.annualcreditreport.com) and review for all
fraud.
 Contact the Ohio Attorney General’s Office. www.OhioAttorneyGeneral.gov
The Federal Trade Commission (www.ftc.gov/idtheft) has a great library of resources
on identity theft ranging from choosing an identity theft service to what to do if you
become a victim. Another nice resource to check out is the Consumer Federation of
America (www.idtheftinfo.org) which provides similar documents. Please contact
RFS if you have any questions or need assistance with identity theft or identity theft
protection. ■
Securities offered through Comprehensive Asset Management and Servicing, Inc. (“CAMAS”), 2001 Hwy 46, Ste. 506, Parsippany, NJ 07054,
1-800-637-3211, Member FINRA/SIPC/MSRB. Reed Financial Services, Inc., is independent of CAMAS.
3690 Orange Place Suite 240 • Beachwood, OH 44122 • (216)464-2090 • www.reed-financial.com
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“The real measure of your wealth is how much you’d be worth if
you lost all your money.” ~Unknown
Janet Edwards, Manager of Client Relations
Back in June, we had a huge tree limb that fell on the roof of our
house which caused some damage to the porch of the house. However, when you start working on a 200 year-old house, one thing
tends to lead to the next which quickly seems to mount up. Then in
August we took a trip out to Colorado and vacations are never free!
Inevitably I started getting anxiety over the fact that I feel like we are
spending money faster than I would like.
However it seems like everyone has been there and stressing about
money just stinks!
The American Psychological Association found that nearly threequarters (72 percent) of adults report feeling stressed about money
at least some of the time, and nearly one-quarter (22 percent) rate
their stress level as extreme. Americans are stressing about money,
and that financial pressure is affecting our health and relationships in
ways we never imagined.
Negative health effects of stress include irritability, fatigue, poor
sleep, eating unhealthy foods, and skipping meals altogether. Our
perception of money and how we manage it can have a ripple effect
through many aspects of our lives. Learning how to have our money
work for us, not against us, is a very important factor of our health.
Stress stems from the way we think about and interact with money
and the solution is not as simple as “just add more.” This may mask
the symptoms temporarily, but the anxiety always returns. One of
the things I like to do from time to time is to take a step back,
breathe and take a closer look.
Some of those steps include1. Assess my current situation
 Am I paying my bills on time?
 Is there any way to automate my bill paying process to make it
easier on myself?
 Are there any bills that I can cut out or reduce? (satellite tv/
radio, etc.)
 Check my credit score.
 Are there extra open credit cards I should close?
 How much am I saving?
Identify my relationship with money and my goals over various
time frames
 Obviously everyone has different goals. For some, it is getting
out of debt or saving up for a big trip, while others it may be
looking at retiring.
 Also in this step, it is important to make sure my spouse and I
are on the same page (This might be easier said than done
though!)
 I set goals over various time frames that I would like to accomplish. In one year I would like to be here. In 5, in 10….
3. Ask for help and guidance
 In my case, yet another perk of my job was that a complete
financial plan was prepared for me offering a road map of
where I needed to go and how I could get there.
 Reed Financial Services is always here to help! However
sometimes talking to a spouse, a trusted friend, or even your
bank can be a useful resource for those in financial need.
4. The hard part….Making a budget and following it.
 Making a budget can feel overwhelming but can be very empowering. The most important thing is making it a realistic
budget and then figuring out how to stick to it.
The goal is always to consider the long–term prospects as opposed the short-term highs. Inevitably, the more we can control
with our finances and plan ahead, the less we should have to
stress about and less stress means better overall health! ■
Ride with Reed!
2.
As part of Reed Financial’s wellness initiative, the team and clients
were invited for a ride along the towpath on bicycles! Thanks to
everyone for coming out and rumor has it that it had been nearly
20 years since one of our clients had been on a bike!!! ■
Securities offered through Comprehensive Asset Management and Servicing, Inc. (“CAMAS”), 2001 Hwy 46, Ste. 506, Parsippany, NJ 07054,
1-800-637-3211, Member FINRA/SIPC/MSRB. Reed Financial Services, Inc., is independent of CAMAS.
3690 Orange Place Suite 240 • Beachwood, OH 44122 • (216)464-2090 • www.reed-financial.com
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