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Richard BransonThank you for taking the time to review our inaugural e-newsletter from Wolfe & Associates. We will be sending this to you monthly with the goal of helping you better understand the current financial landscape and your potential investment options.

Of course, we don’t need to tell you that the world of finance has changed dramatically in the last 18 months. With nearly 30 years of experience under my belt, I am confident that my team can help educate you to better understand how to traverse this new economic landscape. The article below on portfolio diversification and asset classes* is a good example of what we’ll be talking about in the coming months.

Indeed, education is our goal and if you like what you read, perhaps you’d like to tell a friend about us. Just click on the “Tell a Friend” button at the top of the page or shoot us over their contact information and we’ll formally introduce ourselves.

As always, if you have any thoughts or comments about the commentary you read below, don’t hesitate to contact me (bwolfe@wolfefinancial.com or my partner Brad Glickman: bglickman@wolfefinancial.com).

We’ll look forward to talking to you soon.

Best regards, Bernie

*Diversification and asset allocation do not protect against the loss of principle due to market fluctuations. It is a method used to help manage investment risk.

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Is your financial portfolio truly diversified? Start by understanding the correlation between asset classes

By Bernie Wolfe, founder,
Bernard Wolfe & Associates

At the start of 2008, investors believed they were getting true diversification on their stock portfolios by investing in a variety of asset classes such as commodities, bonds, and real estate investment trusts (REITs). The prevailing thought was that these other asset classes would provide some hedge against pure stock portfolios.

Then the bottom dropped out. Last year’s global financial margin call, including a general collapse in the housing market and mass deleveraging of the financial system, caused many investors to liquidate everything and anything that had a market value. The spreads of many underlying securities widened, and prices dropped across the board. Keep in mind, certain bond positions dropped significantly, even in cases where there was no exposure to troubled assets.

So we began rethinking our strategy. Traditionally, many financial planners bought in to one philosophy: Buy and hold. This strategy has typically worked for the last 80 years. Indeed, studies have shown* that if you held a fully invested stock portfolio over that time period, your returns far exceeded those of bonds, treasuries, and cash. However, there aren’t many people who have 80 years to wait for their investments to increase. And we believe our retired clients, and those nearing retirement, cannot afford to go through another 2008.

Our new motto: Row, don’t sail. Today, we are more concerned with how our clients’ portfolios will perform over the next 5 to 10 years. Indeed, there remains plenty of uncertainty given all of the recent and pending changes to our economic system. As a result, the “old school” buy-and-hold strategy may not be the safest direction moving forward. Some of the strategies we are now implementing should not be confused with market timing, for we do not believe anyone can consistently time the market — especially in this day and age.

Suggested strategies include using non-traditional asset classes, which truly have little to no correlation to traditional stock indices. While correlations among asset classes are now looked at differently, there is no denying that certain alternative investments can be a very effective hedge. There are also strategies that can produce positive returns based on sustained trends and volatility in several different traditional and non-traditional markets. While there are no guarantees, absolute return strategies are designed to provide positive returns in both good and bad markets.

The bottom line. We now want some of our strategists to have the ability to go 100% cash or stay 100% fully invested depending on the market environment. In addition, it is important to have some downside protection on stock portfolios through the use of stop orders. All of these strategies are designed to reduce the overall volatility of portfolios. Lower volatility does not necessarily mean lower returns.

To paraphrase one of our strategists, “we want to get as much of the upside while missing most of the downside.” So if the markets continue to be volatile, implementing some of these strategies should put our clients in a better position to help reach their financial goals.

*Past performance does not guarantee future results.

Questions? Contact Brad Glickman or myself for more information at 301.652.9677, and visit www.bernardwolfe.com

About Bernie Wolfe

Bernard R. Wolfe (Bernie) founded Bernard R Wolfe & Associates, Inc. (BRW) in 1981 and for nearly 30 years our Financial Professionals have provided wealth management services to individuals, families and businesses. Bernie is a CERTIFIED FINANCIAL PLANNER™ practitioner as well as a Certified Divorce Financial Analyst (CDFA). He was also one of the first members of the Registry of Financial Planners in the Washington DC area.

In 2002, BRW was sold to National Financial Partners, Corp. (NFP), one of the nation's leading independent financial services companies and a member of the New York Stock Exchange. Bernie Wolfe continues as President of BRW and as a principal in the company.

This is actually Bernie’s second career for the native of Montreal, Canada made a name for himself in the 1970s as a celebrated professional hockey player. He began that career while studying for his Bachelor of Commerce degree with a major in finance at Sir George Williams University and played four years of varsity hockey. He received the Rookie of the Year award, Most Valuable Player, Athlete of the Year, three-time All Star, and All Canadian.

graduateSaving for college and grad school: The power of 529 Funds

By Brad Glickman

How parents can best save or manage their savings when it is highly likely that one or more of their children will go on to graduate school? That’s a question that we are frequently asked. Our opinion is that if it is highly likely that your children will pursue advanced degrees, it makes sense to start saving now.

One good approach is to invest in 529 plans, which allow for federally tax-free withdrawals for post secondary school expenses and includes undergrad and grad school. In the unlikely scenario that someone saves too much (unlikely because tuition costs are currently skyrocketing and increasing at a pace much greater than inflation) then earnings withdrawn for non-education expenses are taxed as ordinary income and may be assessed a 10% penalty*.

However, 529 plans give you the flexibility to change beneficiaries (without penalty) to another family member. At Wolfe & Associates, we can help educate you regarding 529 plans.

For details about 529 Plans click here or email Brad here.


*NFP Securities, Inc. and its Registered Persons do not provide legal or tax advice. Individuals may only provide tax services to clients if they are properly licensed as a CPA in the state in which they provide tax advice and their license is active and in good standing.

There is no guarantee that the plan will grow to cover college expenses. In addition, depending upon the laws of your home state or designated beneficiary, favorable state tax treatment or other benefits offered by such home state for investing in 529 college savings plans may be available only if you invest in the home state's 529 college savings plan. Any state-based benefit offered with respect to a particular 529 college savings plan should be one of many appropriately weighted factors to be considered in making an investment decision. You should consult with your financial, tax or other adviser to learn more about how state-based benefits (including any limitations) would apply to your specific circumstances and also may wish to contact your home state or any other 529 college savings plan to learn more about the features, benefits and limitations of that state's 529 college savings plan. You may also go to www.collegesavings.org for more information.

Please consider the investment objectives, risks and charges and expenses associated with municipal fund securities before investing. This and more information is available in the issuer's official statement. Please call (phone number) for an official statement. Please read the official statement carefully prior to investing


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About Brad Glickman

Since graduating with a degree in finance from the A.B. Freeman School of Business at Tulane University in 1995, Brad Glickman began his career at Bernard R. Wolfe & Associates, Inc. He is a Registered Representative and an Investment Advisor Representative of NFP Securities, Inc., a CERTIFIED FINANCIAL PLANNER™ practitioner (CFP®), and in 2005 became a partner at Wolfe & Associates. Email Brad here.

wall street
Useful Information from Bernie Wolfe and Brad Glickman

“TARGET-DATE FUNDS COME UNDER FIRE,”
6/19/09 Wall Street Journal

“Popular retirement-plan investments called target-date funds came under a barrage of criticism at a Washington hearing Thursday as regulators sought to dissect their poor recent performance,” wrote reporter Eleanor Laise in a June 19 Wall Street Journal article.

At the joint hearing held by the Securities and Exchange Commission and the Department of Labor, regulators examined the funds and questioned everything from how the funds are named and marketed to how their investment mix changes over time. Laise explained that the scrutiny comes after target-date funds designed for people now in or near retirement hit investors with big losses last year. “Funds with target dates between 2000 and 2010 lost 22.5% in 2008, according to investment-research firm Morningstar Inc.; those with target dates between 2011 and 2015 lost 28%,” she shared.

If we experience another crisis of confidence in the financial system, the stock to bond ratio will probably not make a difference. In all likelihood, these participants will need to look outside of their retirement plans to get the true diversification because of the limited scope of available options within many ERISA retirement plans.

Read the entire Wall Street Journal article here. We would be happy to give you a thorough explanation and our expert analysis of life cycle funds to further educate you regarding these types of investments! Feel free to send us any questions or thoughts on this topic: bglickman@wolfefinancial.com

The web site links referenced are being provided strictly as a courtesy. Neither us, nor NFP Securities, Inc. are liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of the links provided. Any distribution of copy-written material is strictly prohibited unless proper permissions have been obtained from the publisher/author.

Published by Inkandescent Public Relations, Hope Katz Gibbs: Editor, Jessica Dean: Graphic Designer

5550 Friendship Boulevard, Suite 570 | Chevy Chase, MD 20815
Phone: (301) 652-9677 | Toll Free: (866) 375-9677 | Fax: (301) 652-9843 info@wolfefinancial.com

Securities and Investment Advisory Services offered through NFP Securities, Inc., a Registered Broker/Dealer.

Member FINRA/SIPC and Federally Registered Investment Advisor.

Bernard R. Wolfe & Associates is an affiliate of NFP Securities Inc. and subsidiary of National Financial Partners Corp., the parent company of NFP Securities, Inc.