Total Clarity: Understanding the Four Keys to Successful Investing

Copyright © 2015 Lucien A. Stephenson

All rights reserved. This book or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher, except for the use of brief quotations in a book review.

Printed in the United States of America

First Edition, Revised

ISBN-13: 978-0692430118 (Custom Universal)

ISBN-10: 0692430113

LCCN: 2015906456

BISAC: Business & Economics / Investments & Securities / Stocks

Author Contact:

Phone: 330-232-9199

Email: [email protected]

Table of Contents

ABOUT THE AUTHOR

ABOUT THE COMPANY

ACKNOWLEDGEMENTS

FOREWARD

AUTHOR’S PREFACE

INTRODUCTION

Buy Low; Sell High

Volatility

Emotional IQ – the Fear or Greed Choice

KEY #1: YOUR INVESTMENT PHILOSOPHY

Diversification

Individual Stocks or Funds?

Buy Low and Sell High

Stocks or Companies?

Technical Analysis

Fundamental Analysis

When to Adjust Your Portfolio

More on Volatility and Risk

Mutual Funds

401(k) Accounts

Lessons Learned

The Best Words for Last – I Don’t Know

KEY #2: YOUR INVESTMENT STRATEGY

Volatility and Returns

Executing the Kiasu Way

Dollar-Cost-Averaging

Why Does Volatility Increase Returns?

Are You a Trader?

When to Sell

Lessons Learned

KEY #3: UNFETTERED FLEXIBILITY FOR YOUR MONEY MANAGER

Hand Cuffs

Penny Jar

Lessons Learned

KEY #4: HIRING A MONEY MANAGER WHO PROVIDES TRANSPARENCY

Opaque Funds

What is a Codependent Relationship?

Costly Emotions

Why We Listen To Forecasts

Not Knowing

Breaking Free of Money-Losing Behaviors

Lessons Learned

CONCLUSION

Endnotes

The cover photo was taken from the bow of the Deep Blue II, a 46-foot catamaran operated by the Moorings Yacht Charter Company. The island in the background is Peter Island in the British Virgin Islands. Peter Island was the setting for Robert Louis Stevenson’s book, Treasure Island.

ABOUT THE AUTHOR

Lucien A. Stephenson, CKA® is President of Stephenson & Company, a Registered Investment Advisor (RIA), and an independent, fee-based wealth manager dedicated to exceeding the expectations of his clients.

He has the capability to deliver Socially Responsible Investing (SRI) as well as Biblically Responsible Investing (BRI) strategies for his clients.

Lucien is the President and Chief Compliance Officer for Stephenson & Company (go to www.stephensoncompany.com) where he is responsible for the firm’s strategic vision and clarity when placing investment assets. He has been active in the financial industry for 18 years.

Lucien has a Six Sigma Green Belt from Villanova University and has an Executive Certificate in Financial Planning from The Ohio State University Max M. Fisher College of Business. Lucien is a proud member of Kingdom Advisors (go to www.Kingdomadvisors.org) and is a Certified Kingdom Advisor™. Lucien is also a Certified StratOp Facilitator for Marketplace & Churches by the Paterson Center, LLC.

Lucien is proud to subscribe to the "Investing with Clarity™" philosophy in relationship with money manager Nepsis Capital Management™ (go to www.nepsiscapital.com).

ABOUT THE COMPANY

At Stephenson, you are working with highly specialized investment professionals. Stephenson & Company is a full service fee-only Registered Investment Advisor (RIA) and financial planning firm based in Dover Ohio. We assist clients throughout the United States, the Caribbean and the world who want objectivity without any product/sales influence. Wealth accumulation and estate preservation includes coordinating our planning with tax, legal and insurance professionals. We follow a disciplined, clearly defined approach to balancing risk and return, and believe that educating clients enables them to make more knowledgeable decisions.

We offer the following comprehensive services to private individuals and small businesses:

Portfolio analysis

Asset allocation design

Investment management

Non-traditional college funding strategies

Non-traditional retirement planning

Estate planning

Business Valuation

Strategic and Operational Planning

When you, our client, are not willing or able to do analyses, our professional money managers take care of picking the companies best suited for your goals.

Stephenson and Company performs strategic and operational planning as well as business valuation services for small businesses. One of the things that we look at is measures of productivity, just as the portfolio manager would do. For us, it is all about how to create financial value for your company.

ACKNOWLEDGEMENTS

I would like to thank my beloved wife, Chinyere, who personifies faithfulness. Her love and devotion to me have been my greatest earthly delight since the day I first caught sight of her at Kent State University in 1993.

To Adora and Kelechi, my amazing children – let your Light shine ever bright as you reach out and grab your life’s potential!

I also had the help of others in producing this book:

Thanks to Tamma Ford, my editor, for her work in pulling this content together. Thanks to Primie Villa Parcon, for all the book’s JPEGs and her interior illustrations. I am also grateful to Chuck D. Etzweiler, CFP, MBA, CIMA, CMT for his encouragements and the insights he so freely shared with me in our conversations about this topic.

FOREWARD by Mark Pearson

It’s all about Clarity™. Today, more than ever, the ability for investors to know what investments they own and the ability to understand why they own them is paramount to being a successful investor. It’s an idea that has got lost in the noise and confusion of the overabundance of media coverage surrounding the financial markets. Total Clarity is an inspiring look at the importance of clarity on the investment process… one that will help readers gain perspective on this critical information.

As the creator of the Four Key Components to Successful Investing™, I have had the opportunity to work closely with Lucien in promoting the idea of Investing with Clarity™. During this time, it is clear that he has both a passion for and a true understanding of the power of Investing with Clarity™ as he has guided investors through the process of understanding the power of knowing what you own and why you own it.

Lucien, like me, believes the key to successful investing lies in having a clear investment Philosophy, Strategy, Flexibility and Transparency. When any one of these Four Keys is missing, investors increase the risk to their investment success. Like a ship without a rudder, a lack of clarity renders investors powerless to navigate the sea of investment options and make the most of their investment opportunities. Total Clarity will help investors reclaim their rightful position as a captain of their own destiny in the investment process.

Investing is a complicated process for most investors. After all, look at the marketplace for today’s investment products. Many firms now market in a manner that aims to convince investors to rely solely on computer-based algorithms. Often times, investors have no idea how these algorithms work, but feel they have no other choice but to