INVESTMENT PHILOSPHY

The FSA Approach

EXPERIENCE IS THE BEST TEACHER.
WE’VE SPENT OVER THREE DECADES GROWING WISER.

FSA believes successful investing is dependent on two factors:

Financial Services Advisory was built on the belief that we can best meet clients’ financial needs and expectations through an active and disciplined approach to investing, not just passive monitoring of accounts. Our strategy is to remain invested during healthy market periods but move defensively to options such as money market funds and inverse funds when price trends reverse. We cater to patient investors who value professional management and want to benefit from long-term returns of the stock and bond markets while minimizing the volatility.

Why Do We Rely on Mutual Funds and Exchange-Traded Funds?

Investing in individual securities comes with inherent risk and volatility. To reduce the effects, FSA uses pooled investment instruments such as open-end mutual funds and exchange-traded funds (ETFs). An added advantage is that mutual funds and ETFs give us access to securities, such as commodities or inverse funds, which are not readily available in other structures.

This strategy gives us many tools to maximize opportunities in the markets. We will use both actively managed funds as well as index funds if we are just looking for exposure to a particular asset class or sector.

PLEASE NOTE: PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THERE ARE ALWAYS RISKS INVOLVED WITH INVESTING, INCLUDING THE LOSS OF PRINCIPAL.

FSA SAFETY NET®*

At FSA, our mantra is “You win by not losing.” This is more than just a catchy phrase. It is the root of our investment philosophy. Portfolio losses have a greater impact on total performance than gains. For example, a 50% loss must be followed by a 100% gain just to break even since that ground has to be regained with half the money. While many advisors and investors constantly seek opportunities for higher returns, we believe protecting your portfolio from sustained downward trends is equally important.  That’s why we created the FSA Safety Net®*.

As important as it is to know what type of fund to buy, it is even more critical to know when to sell.

The FSA Safety Net®* is designed to represent an exit point for each security in your portfolio.

As the price of each security drops, it is sold when it crosses through the stop-loss point. The goal is to prevent small losses from turning into major losses. The exit point is like a safety net used to protect a trapeze artist. The net is set low enough to allow the trapeze artist freedom to move but high enough to protect against catastrophic injury.

We customize a safety net for each Fund.

As prices rise, we raise the “net,” maintaining a consistent distance under the fund price. Eventually, when price trends reverse, we hold the net tight. When the price hits the net, we sell the specific fund, thereby reducing an investor’s potential losses.

The FSA Safety Net®* has shown to be highly effective in preserving gains when price trends reverse. However, it’s no guarantee against adverse situations where mutual fund companies, custodian companies, or the bond and stock market exchanges themselves may, at their discretion, suspend, disallow, or fail to conduct trades, redemptions, or liquidations.

Please note: Past performance does not guarantee future results. There are always risks involved with investing, including the loss of principal.

*FSA Safety Net Disclosure

The FSA Safety Net® is not effective in protecting assets in periods leading up to and including abrupt or sharp market drops, such as those that occurred in the market crash of 1987, the market drop of 1989, the market disruption after the terrorist attacks of 2001, flash crashes, and similar situations. See Disclosures page for more information.

Past performance is no guarantee of future results. There are always risks involved with investing, including the loss of principal.

Follow The Money

Follow the Money
Law of Supply and Demand –When demand exceeds supply, prices rise.

Adjust Your Sails

Just as an experienced sailor adjusts the sails to catch the wind when it switches direction, we adjust your investment allocation to respond to shifts and changes in the market.

Selective Investments

FSA does not believe in holding the same investments through all market cycles. Asset classes and sectors go through extended periods being in favor and out of favor. Our strategy is to own those assets when they are in a favorable cycle and avoid them when they are out of favor.

Following the Money

Identifying when assets are in-favor is a function of “following the money” into investment areas dominated by buyers during good market cycles. It is as simple as supply and demand.

When demand dominates, prices rise. For example, during the late 1990s, money flows were greatest in technology stocks; in the early 2000s, real estate, emerging markets, and commodities dominated money flows. After the financial crisis of 2008, money flowed predominantly into all types of bonds.

When investors shift and move money “out,” the FSA Safety Net®* — our exit strategy — is in place.

Investment Strategies

Select an Investment Strategy that meets your needs:

INCOME

This strategy invests in income-oriented securities (i.e. corporations, governments, and municipalities) within U.S. and international markets while emphasizing capital preservation and minimal market risk.

INCOME AND GROWTH

This strategy invests primarily in income-oriented securities, supplemented by some U.S. or international securities with a potential for capital appreciation. Investors should be willing to accept modest stock market risk and volatility.

CONSERVATIVE GROWTH

This strategy seeks both capital appreciation and income by investing among stock, bond, international and other securities. Investors should be willing to accept moderate stock market risk and volatility.

CORE EQUITY

This strategy diversifies among appreciation-oriented securities within U.S. and international markets. Investors should be willing to accept market risk and volatility normally associated with an all-stock portfolio (i.e. S&P 500 index).

TACTICAL GROWTH

This strategy emphasizes growth through the use of any type of security. Portfolios will, at times, be concentrated in volatile appreciation or income-oriented securities within U.S. and international markets. Investors should be willing to accept increased volatility and trading, with less diversification.

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