Chris Gurnee • Foresters Equity Services Inc. - 85,000 on the Dow: Pipedream or realistic possibility? Book review by David Wismer - European stocks continue on torrid pace - Risk on, until it isn’t by Jeanette Schwarz Young - Managing 403(b) referrals in a tight-knit academic setting (Johnathon Davis, Retirement Tax Advisory Group)

1. April 16, 2015 | Volume 6 | Issue 3
Active investment management’s weekly magazine
European stocks continue
on torrid pace
Dow
85,000
Managing 403(b) referrals
Jeanette Schwarz Young:
Risk on, until it isn’t
Pipedream or
realistic possibility?
Chris Gurnee
Quick to listen,
slow to speak
Navigating clients through
market volatility

3. Advisor perspectives on active investment management
- A custodian that makes your life as an RIA simpler.
Easing client fears
There is a secondary benefit to active management
in terms of client attitudes. Many clients, especially
prospects and new clients, are still very concerned
with the risk in the stock market. Explaining the active
management story and its risk-management focus
helps to overcome at least some of those fears.As my
practice grows, I continue to move more client money
into active management. Active money managers
have tremendous resources and models that I cannot
replicate on my own, nor would I have the time to
monitor them anywhere near as effectively.
LOUD & CLEAR
Steve Redelsperger • Minneapolis, MN
Redelsperger Financial Group • Cadaret, Grant & Co. Inc.
3April 16, 2015 | proactiveadvisormagazine.com
LOUD & CLEAR

4. 85,000
on the Dow
Pipedream or
realistic possibility?
85,000
on the Dow
Book review by David Wismer
proactiveadvisormagazine.com | April 16, 20154

5. o, “Dow” and “85,000” in the
same sentence is not a typo. And
this has nothing to do with Apple
joining the Dow Jones Industrial
Average (DJIA), propelling it to astronomical
levels.
What this is all about is a recent book by
authors Marshall and Trent Schield—“Dow
85,000! Aim Higher!”—that lays out the case
for the next great secular bull market for stocks.
And the rationale for a target as lofty as 85,000
for the Dow over the next fifteen or so years.
Back in early 2000, record market highs
were being made daily, money was easy, and
brokerage ads were touting “make your fortune
by day trading.” If someone had told you then
that the party was over, and that for the next
decade stocks would lose money, would you
have listened? Probably not.
Similarly, what if sophisticated trading
signals showed a way to avoid the majority of
the declines in the 2007-09 bear market, and
those same signals turned bullish well before
the market’s recovery became broadly apparent?
Would you have followed that advice, difficult
as it may have been to accept?
Of course, conviction around those indica-
tors would have led to an extremely valuable
course of action in all three cases. The father-
and-son Schield team has rarely hesitated in
letting their models guide them to bold (and
profitable) calls on both the bearish and bullish
sides of the market. So when they make a case
for the Dow reaching 85,000 by 2030, and
support it with a raft of logic and data, it is well
worth listening to.
According to the authors, the market moves
in long-term cycles, with lengthy underperfor-
mance followed often by even longer periods
of outperformance. The decade of poor perfor-
mance, they say, is behind us, and a new mega
secular bull market has begun—one lasting de-
cades and potentially producing 700%+ gains.
It is, they believe, a rare opportunity. And an
opportunity that can be even further leveraged
by the use of active portfolio management
strategies and tools: Adding to gains in cyclical
bullish trends and minimizing losses during the
inevitable cyclical bearish periods.
History shows just how persistent gains can
be in periods of secular bull markets, even with
corrections along the way.
to home construction innovations fueling the
post-WWII housing boom and a new consum-
er-driven economy, to the great technology
innovations of the 1980s and 1990s.
But what will fuel the next secular bull?
On Wall Street there is an old saying that
states, “While the market doesn’t always repeat
itself exactly, it often rhymes.” Applying that
knowledge, it is easy to see that each of the new
mega boom markets of the last century had
some strong similarities.
First, the obvious. Each mega boom fol-
lowed a terrible, long, grueling secular bear
market that included several recessions, subpar
economic growth, often war, and terrible stock
market returns.
continue on pg. 11
N 1982-2000
1949-1968
92%
82%
Time spent in rising markets during mega bull markets
0% 20% 40% 60% 80% 100%
The new boom, the new secular bull market.
The new boom—What trends may trigger it?
Second, every new boom had a trigger.
A new innovation or breakthrough is needed.
The book offers several compelling arguments:
• Continued technology breakthroughs in
domestic energy production, leading to
increased American energy independence
and “plentiful, dependable energy for de-
cades to come.”
• Cheaper (and cleaner) energy in turn
transforming a “Rust Belt” mindset into a
manufacturing rebirth in the U.S., which
will also trigger a reversal in the trend of
outsourcing production and jobs abroad.
“While managing market risk remains paramount, the biggest
risk might be in missing the next great secular bull market.”
—Marshall Schield & Trent Schield, “Dow 85,000! Aim Higher!”
So what lies ahead? What will spark the next
big boom? Despite market gains since early
2009, pessimism still runs high with investors
and most are hard-pressed to envision a long
secular bull market.
The authors believe all of this pessimism
is unfounded: “Conventional wisdom that we
are in an extended period of subpar growth
is wrong. That many experts believe investors
should be prepared for a ‘new normal’ of below
average returns for the next decade is simply
wrong.”
The Schields’ fundamental thesis is that big
powerful bull markets (18-20 years or longer)
are a “breed by themselves; not just rebounds
in a secular bear.” These new bulls, they say, are
the result of the world changing in surprising
ways that fundamentally alter the future. They
come as a pleasant surprise to investors, grad-
ually changing their pessimism to optimism,
and driving prices to new highs that are hard to
imagine at the onset.
They cite historical technological break-
throughs and trends that helped trigger past
secular mega bull markets, leading to stock
market gains of 700% or better over decades.
Their examples range from Henry Ford’s initial
leadership in manufacturing mass production,
Source: Dow 85,000! Aim Higher!
April 16, 2015 | proactiveadvisormagazine.com 5

7. 9000
10000
11000
12000
13000
MAY JUN JUL AUG SEP OCT NOV DEC FEB MAR APR2015
European stocks continue on torrid pace
ew money poured into Europe’s
exchange traded funds and products
(ETFs/ETPs) during the first quarter
of 2015, with Europe’s share of funds
flow gathering pace as the European Central Bank
(ECB) started its quantitative easing program.
CNBC reports that a record net 60% of
fund managers were overweighted to European
equities in March 2015, up from 55% in
February and 20% in January (citing a Bank of
America-Merrill Lynch Fund Manager Survey).
The significant drop in the euro, lower energy
prices, and the likelihood of a Fed rate hike have
further contributed to the impressive rally in
European stocks. Barron’s notes that the Stoxx
Europe 600 has notched a 21% gain in 2015
through Friday (4/10), compared to the U.S.
equity market’s stop-and-go increase of about
2%. They say, “When 2015 began, few market
observers would have guessed that European stock
markets would leave the S&P 500 in the dust.”
What might be even more impressive in the
European rally is the fact that it has occurred in
the midst of the ongoing Greek debt drama, the
Ukraine situation, and global tensions over the
Iran nuclear deal. However, CNBC’s reporting
indicates that many fund managers are viewing
the Greece situation as “a market hiccup at best.
While a Greek exit from the euro zone, dubbed
a Grexit, might be tragic and chaotic for Greece,
financial markets might not react much.”
Michael Strobaek, global chief investment
officer at Credit Suisse, says, “That’s not a black
swan thing. It’s a grey swan, I guess. I don’t think
the markets are going to riot. Even if interest
N
Source: Bloomberg data, Deutsche Boerse AG German Stock Index DAX
rates were to go up because Greece went out, it’s
not a disaster.” Other heavily indebted countries
such as Spain and Italy should still have access to
relatively low financing rates, he believes.
The ECB’s move to further expand quanti-
tative easing, announced in January, has perhaps
had the most profound impact on Europe’s stock
rally. With bonds in Europe offering record low
returns, investors are instead pouring money into
stocks of solid, well-rated companies that pay
regular dividends. The bond-buying program has
pushed government bond prices higher, reducing
yields, and forcing investors to look further afield
for decent returns.
Germany’s DAX index, for example, has
had an unprecedented string of record closes in
2015. The Wall Street Journal interviewed Tony
Lanning, who manages multi-asset funds at J.P.
Morgan Asset Management. He said, “You are
getting people selling traditional fixed income
to buy equities. This hunt for yield is only just
beginning. We think with German government
bonds yielding next to nothing, buying a good
quality German company yielding 2.5% is a safe
way to buy equities.”
GERMAN DAX INDEX OVER PAST 12 MONTHS
7April 16, 2015 | proactiveadvisormagazine.com
TOPPING THE CHARTS

8. Proactive Advisor Magazine: Chris, how
do you view your role with clients?
Chris Gurnee: My role is to continually
build relationships, manage risk, and set clear
client expectations. All require me to be “quick
to listen and slow to speak.” One of the best
ways to accomplish these goals is by meeting
with clients on a systematic basis.
I put myself in my clients’ shoes and ask,
“What would I expect from someone helping
to manage my investments, goals, and expec-
tations?” I would want communication on a
regular basis to seek clarity amidst all of the
financial noise out there and to hear about the
plan for the path ahead.
Describe the risk side of the equation.
When it comes to managing risk and put-
ting my clients’ best interest first, active money
management is paramount. I have a commit-
ment to navigate my clients through market
volatility.
I have not had many potential clients say,
“Chris, I saved too much money for retire-
ment,” but I have had a number of potential
clients say, “I do not want to experience another
2008 market correction—especially without
some type of preparation or protection from
steep losses.”
Active third-party money managers provide
a team of experts who are dedicated to keeping
the financial noise at minimum and seeking
suitable opportunities for my clients to keep
them on target in terms of their overall invest-
ment plan. This is a team effort, so to speak, and
requires multiple strategy elements, including a
role for active investment management.
I explain this concept to a potential client by
summarizing one simple aspect of risk-adjusted
returns: Our objective is to take on less risk than
Quick
to listen
slow
to speak
Navigating clients through
market volatility
By David Wismer
Photography by August Miller
proactiveadvisormagazine.com | April 16, 20158

9. Chris Gurnee
President, Cornerstone Financial and Associates Inc.
Ogden, UT
Broker Dealer: Foresters Equity Services Inc.
Estimated AUM: $60M
Licenses: 6,63,65, Life and Health
Christopher Gurnee has been a financial services professional for nearly 15 years and is
the president of Cornerstone Financial andAssociates Inc.,based in Ogden,Utah.He is a
Registered Representative of and offers securities through Foresters Equity Services Inc.
Mr. Gurnee says, “My background includes 20 years of experience as a successful and
self-motivated small business owner. My career in financial services started just prior
to the dot-com crash and 9/11. It was baptism by fire in managing client expectations
and risk in the first years of my career. I credit these early experiences to forging an
understanding of the importance of managing risk and developing shared expectations
with clients.”
After spending his early years abroad growing up in a military family,Mr.Gurnee has been
a resident of Utah for many years. He and his family enjoy a variety of outdoor activities,
including hiking,biking,and camping.Mr.Gurnee,his wife Rebecca and two children also
love to travel,with warm weather scuba sites a favorite destination.He says,“While there
is never a shortage of family activities in these great Utah outdoors, a tropical vacation is
a welcomed brief escape from the tough winters.”
Mr.Gurnee is active in several charitable and faith-based activities,including Compassion
International,a Christian organization dedicated to the long-term development of children
around the world.
continue on pg. 10
a traditional market index but to attain fairly
comparable returns over time. This disciplined
approach puts our team in a great place to move
towards the client’s investment goals. While there
areneveranyguaranteesonthis,andthesuitability
of strategies has to be strongly considered, histori-
callyweknowthiscanbeachievedformostclients.
So, simply put:Take less risk while finding returns
that can meet our investment plan objectives.
When were you introduced
to active management?
I am relatively new to it, just since 2014.
After the lessons learned during the dot-com
crash, and then the 2008 credit crisis, I knew
there had to be better answers than traditional
asset allocation. I knew intellectually and
emotionally that there had to be alternatives, but
it took me some time to find the right solutions.
You can put together sound investment
plans and allocations that fit with all of the prin-
ciples of Modern Portfolio Theory, and be on
pretty legitimate ground doing so. But to me, it
was increasingly becoming obvious that that was
not the optimal solution for client investment
needs, especially those planning for retirement.
This was a definite need for my clientele—
and I felt I was not truly serving the best interests
of my clients if I did not at least offer the option
of active investment management. I have been
extremely busy since making that decision and
finding a strong third-party active manager as a
partner. I have placed a substantial portion of
client money toward the active platform since
making that change within my practice.
How have clients responded to this?
Very positively. It does take a substantial
amount of education. So many people have
been told their entire lives that investing is
all about setting and rebalancing asset alloca-
tions—essentially to buy-and-hold and every-
thing will work out fine in the end.
But it has become increasingly clear, as we
saw during the 2008-09 period, that people just
do not have the stomach for that type of market
volatility. They will make bad decisions under
stress. They may have said prior to that period
that they wanted the types of returns that the
market can produce in big up years, yet did not
fully understand the level of risk associated with
those returns.
“Our objective is to take on less risk than a
traditional market index while attaining
fairly comparable returns over time.”
9April 16, 2015 | proactiveadvisormagazine.com

10. Christopher Gurnee is an Investment Advisor Representative offering securities and advisory services through Foresters Equity Services Inc., member FINRA,
SIPC and a Registered Investment Advisor. Cornerstone Financial & Associates Inc. is independent of Foresters Equity Services Inc.
The reality is that there are bear markets. We
know there will be other major downturns, we
just do not know when. We need to prepare for
those. How can we best do that? Is it through
asset allocation? That can be very helpful, un-
doubtedly. However, taking it a step further, we
can add an active management component to a
portfolio to help manage risk better. That may
not be the key for everyone, but it plays a big
role for a lot of clients.
I can show clients the returns of the market
for periods such as 2001-03 and for 2008, and
look at the results of several active strategies.
For the most part, they were able to minimize
losses or, in some cases, even show a positive
return. We then look at the results of a typical
well-allocated mutual fund portfolio. There was
really no place for most investors to hide.
When you combine that type of analysis with
the difficulty of making up for losses in down
years, and then compare it to the compounding
of smoother, less-volatile returns, the active
approach has a lot of appeal for most clients.
Average investors, myself included, are concerned
about volatility returning, and we are looking for
ways to help mitigate and reduce that risk.
Which types of clients are more receptive
to active management?
I have built a focus for my practice around
serving the needs of clients in transition. These
can be upsetting situations such as a layoff or
death of a spouse, or much happier circumstanc-
es such as new employment, marriage, the arrival
of children, or moving fully into retirement.
The commonality for all of these clients is
their desire to move forward with their financial
lives in a well-planned, structured, and disci-
plined fashion. This is where I think I can add
great value. Active investment management is
becoming an increasingly important tool that I
can use on behalf of my clients as they plan for
the major changes in their lifestyles.
continued from pg. 9
Chris Gurnee
10 proactiveadvisormagazine.com | April 16, 2015

11. • The demographic trends of Millennials
providing a new investment tailwind, as peak
earners35-49yearsoldreplaceagingBoomers.
• A secular bond bear market that will
benefit stocks.
• An improving deficit situation that becomes
a smaller percentage of U.S. GDP, coincid-
ing with a lower ratio of imports to exports;
the right slope of these “Twin Deficits” has
forecast prior secular bull markets.
continued from pg. 5
continue on pg. 14
85,000 on the Dow
trend and momentum of over 100 sector or in-
dustry groups, providing both a filter for sector
selection, as well as an important gauge of the
market’s overall health. They write of MEI:
By combining numerous indicators
measuring the trend and momentum of all
the underlying parts of the market, we be-
lieve MEI gives a more timely and accurate
view of the market’s direction and health
than looking at one or two indicators. No
indicator is perfect—it is impossible to sell
consistently at the exact top or to buy at the
exact bottom. A successful risk management
indicator, however, is: (1) right more often
than wrong, and (2) leads to participating
in large gains and avoiding large losses.
Why Dow 85,000?
$400
$350
$300
$250
$200
$150
$100
$50
$0
$363
$97
S&P 500 earnings forecast
2011
(actual)
2030
(with 7.2% growth)
Here the Schields posit that growing U.S.
manufacturing and GDP will lead to the levels
of historical earnings growth and P/E expan-
sion seen in prior secular bull markets. Using
a conservative figure of 7.2% average annual
earnings growth over the 2011-30 period
(compared to the 8.1% earnings growth rate
of 1982-2000), and a P/E expansion less ag-
gressive than that earlier period, they arrive at a
rather remarkable, but logical, target for overall
total U.S. earnings by 2030.
Financial commentator Larry Kudlow is
fond of saying, “Earnings growth is the nurtur-
ing milk that feeds the stock market.” Applying
P/E assumptions to this 2030 earnings level and
using some simple calculations, the Schields
arrive at targets of 8,800 on the S&P 500 and
85,000 on the Dow for 2030.
But here is where it gets truly interesting.
better performance over the long term than a
passive investing approach.
While there are many components to their
active strategies, it comes down to two basic
principles: (1) taking action with conviction
when their indicators signify a new trend is
developing, whether that be bullish or bearish,
and (2) employing systematic methods in bull-
ish market trends to identify “market leaders.”
They also apply a judicious use of leveraged
tactics when conditions warrant, increasing
returns during favorable environments.
Using their proprietary methodologies,
the Schields focus on sectors with the highest
probabilities of market outperformance. They
cite an eye-opening statistic from actual results
for 2013: leading market sectors were up on
average 75%, while lagging sectors had average
gains of just 20% (as the S&P 500 was up
32%). They argue, “Doesn’t it make sense to
overweight the winning sectors while avoiding
the laggards as much as possible?”
They combine these analytics with sev-
eral other proprietary tools used by STIR
Research LLC. One of these, STIR’s Market
Environment Indicator (MEI), measures the
Aim higher!
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
Possible bull/bear moves within the DJIA 2011-30
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
10655
19700
28000
41000
59000
85000
Marshall and Trent Schield have been
studying and developing active portfolio strat-
egies for decades. One of their core beliefs is
that active investment management can lead to
The bottom line.
Marshall and Trent Schield believe, with
supporting evidence, that markets have the po-
tential to deliver mega secular bull market gains
over the next 15 years. It might not be a steady
path, as the chart shows, and will still require
serious risk management. But the bigger risk is
perhaps missing out on the huge gains that may
materialize.
Source: Dow 85,000! Aim Higher! Source: Dow 85,000! Aim Higher!
11April 16, 2015 | proactiveadvisormagazine.com

12. Dubuque, IA 52001 | 800.548.2993 | americantrustretirement.com
A solution different from
any other.
• Open architecture platform
• Active and tactical portfolios
• §3(38) investment management services
• Discretionary trustee services
• 170 PLANSPONSOR Best in Class awards
since 2008
Request a copy of Ten Reasons Why You Should
Partner with American Trust Retirement!
Simply better retirement.
Simply better partner
The new era of
low stock returns?
Future returns on stocks are likely to be far slimmer
than the fat gains of the past few years, averaging
2-2.5%, says Jason Zweig of The Wall Street Journal.
5 great myths about
referrals
What might be stopping you from getting the quantity
and quality of referrals your practice deserves?
Is there really a battle
between active and
passive investing?
While the debate swings back and forth depending
on market conditions, neither approach has to be “all
or nothing.”
L NKS WEEK
proactiveadvisormagazine.com | April 16, 201512

13. Risk on,
until it isn’t
Jeanette Schwarz Young is the author of the Option Queen Letter, a weekly newsletter issued and published every Sunday, and the OPTIONS DOCTOR, published by John
Wiley & Son in 2007. She was the first director of the CMT program for the Market Technicians Association and is the current president of the American Association of
Professional Technical Analysts.
risk-off trade occurs when investors
or market players become scared or
frightened about financial events or
global happenings. Their tolerance
for pain from a loss becomes limited and the
asset of choice becomes something safe like a
Treasury bill or note, AAA bonds, and other
vehicles that are perceived as safe and, of
course, cash.
The employment of this type of investment
removes risk of loss from the investments and at
the same time gives up growth and yield. This
behavior is generally seen during times of crisis
such as the Greek debt problems, the 2008-09
financial crisis, European Central Bank issues,
currency problems in Russia, etc., or in other
risks to the economy or global arena. Typically,
during a recession, or perceived recession, the
risk-off trade prevails and we see money put
to work in safe government bonds or insured
bonds. Is there growth in these portfolios? Not
much, but the minuscule return is more pleas-
ant than the chance that a loss will occur. The
iShares 20+ Year Treasury Bond ETF (TLT) is
an example of a risk-off vehicle. SPDR Barclays
High Yield Bonds ETF (JNK) is the opposite.
Notice on the chart that the black line, that
of TLT, seems to go in the opposite direction
as that seen for the red JNK chart. TLT is a
risk-off trade and JNK is a risk-on trade. What
are the differences? Risk and yield. Also notice
that when these lines cross (the red going down
and the black going up), the chart is telling you
that complacency and good feelings are not
abundant in the markets. You do not need a
newsfeed to observe this change in mood.
A
In recent days we have seen the risk-on trade
return. We have seen the iShares Russell 2000
ETF(IWM)approachanall-timehigh.ThisETF
is the poster child for U.S. growth companies.
If the market perceives stability and no threats
to our economy, this ETF becomes the vehicle
of choice for many investors. Additionally, this
ETF is less adversely affected by the strong U.S.
dollar, as most of the companies in this index are
not as reliant on exports as larger companies. The
emerging markets ETF (EEM) similarly seems
to be a magnet for risk-on trades.
The market is in an interesting position
now, hanging on the words of Fed Chair Janet
Yellen and other members of the FOMC. While
markets have recently reacted positively to the
statements that the Fed will move slowly on
increasing hikes, the consensus is that the hikes
should begin to appear sometime in late 2015.
What happens when interest rates go higher?
The U.S. dollar should rally further and U.S.
multinational companies will face further chal-
lenges in exporting their products. How will that
impact the S&P 500? Will it be negative for the
markets as earnings are impacted by the strong
currency? Frankly, the FOMC is in a very difficult
position. In my opinion, if they keep interest rates
at almost zero, they risk inflation. We are probably
at greater risk currently of deflation. A strong U.S.
dollar is deflationary, not inflationary.
The lesson to be learned is that no one asset
class or sector trades without reflecting the in-
fluence of macroeconomic events and monetary
policies around the globe. Markets are more
interconnected than ever before and analysis
must be employed that looks at the bigger pic-
ture. Take a look at the seemingly contradictory
influences in our markets these days. We have
higher interest rates than most of Europe and
therefore money moves into our markets from
abroad, which in turn supports our markets and
a risk-on trade … until it doesn’t.
Proactive Advisor Magazine presents weekly commentary provided by well-known market analysts, financial authors, investment newsletter publishers, and economists. The opinions expressed
each week represent their personal perspectives and not necessarily those of the magazine.
Source: UDATA
April 16, 2015 | proactiveadvisormagazine.com 13
HOW I SEE IT

14. Therecanbenoassurancethatanyinvestmentproductwillachieveitsinvestmentobjective(s).Therearerisksassociatedwithinvesting,includingtheentirelossofprincipalinvested.Investinginvolvesmarketrisk.The
investment return and principal value of any investment product will fluctuate with changes in market conditions. Guggenheim Investments represents the investment management businesses of Guggenheim Partners,
LLC. Securities offered through Guggenheim Funds Distributors, LLC. Guggenheim Funds Distributors, LLC is affiliated with Guggenheim Partners, LLC. x0516 #17180
Explore how a tactical approach may help
maintain diversification.
How diversified are investor portfolios? The answer is that, when diversification
is needed most, portfolios may not be as diversified as investors assume. In this
paper, we will explore the concept of portfolio diversification, the impact of
evolving financial markets, and why we believe tactical management is playing
an increasingly pivotal role.
Request your free copy.
Call 800.258.4332 or visit guggenheiminvestments.com/dilemma
The Diversification Dilemma
Tactical Management and
Today’s Evolving Markets
By Douglas C. Mangini, J.D., Senior Managing Director
Chicago | New York City | Santa Monica
continued from pg. 11
Within this secular bull market environ-
ment, they also believe that their specific
proprietary strategies, grounded in active
investment management, can deliver even
greater gains than the overall market averages.
Jerry Wagner, president of Flexible Plan
Investments Ltd. and author of the book’s
foreword, provides a closing thought:
This book is unique. It presents a strong
case for its end goal—Dow 85,000—just
as other books have argued eloquently for
their predictions. The difference is that
Trent and Marshall present us with a quan-
titative methodology that not only seeks to
improve on their prediction (with superior
investment results), but also gives us a set
of defensive tools to defend against cyclical
bear markets, as well as the possibility their
prediction does not come to pass.
Editor’s note:
Readers can learn more about “Dow 85,000! Aim Higher!”
at http://www.dow85000aimhigher.com/
85,000 on the Dow
Marshall Schield is the chief strategist for STIR Research LLC, a publisher of active allocation indexes and asset
class/sector research for financial advisors and institutional investors. After graduating from college in three years,
he became the youngest stockbroker in the nation in 1968 at age 21.As an active strategist for over four decades,
Mr. Schield has received national recognition from several leading industry publications and services that track
strategy performance. He is proud of the fact that he avoided much of the carnage of the early 2000s and 2008,
while “participating in the majority of every major bull market since 1970.”
Trent Schield,Marshall’s son,is a regional sales manager with Flexible Plan Investments Ltd.,and was first introduced
to investment management at his father’s firm. He has over 20 years of experience and has helped hundreds of
advisors understand the concepts and principles of active strategies. His first love is active sector allocation strategies,
and he says,“Investors need to know they can do better, much better, than simply buy-and-hold.” Mr. Schield has the
experience of working one-on-one with advisors and their clients and addressing groups well into the thousands at
national conventions.
20%
15%
10%
5%
0%
11.5% 11.6%
16.3%
17.8%
Secular bull annualized returns
1949-1968 2011-2030 (forecast) 1982-2000 2011-2030
“Aim Higher!” goal
Source: Dow 85,000! Aim Higher!
14 proactiveadvisormagazine.com | April 16, 2015

15. Advertising
proactiveadvisormagazine.com/advertising
Reprints
proactiveadvisormagazine.com/reprints
Contact
info@proactiveadvisormagazine.com
Copyright 2015© Dynamic Performance Publishing,
Inc. All rights reserved. Reproduction of printed form,
whole or in part, without permission is prohibited.
Editor
David Wismer
Associate Editor
Elizabeth Whitley
Contributing Writers
David Wismer
Jeanette Schwarz Young
Graphic Designer
Travis Bramble
Contributing Photographer
August Miller
April 16, 2015
Volume 6 | Issue 3
Proactive Advisor Magazine is
dedicated to promoting and educating
on active investment management.
Distribution reaches a wide audience
of financial professionals who advise
clients on investments and portfolio
management. Each issue features
an experienced investment advisor
who offers insights on active money
management, client service, and
investment approaches. Additionally,
Proactive Advisor Magazine offers
an up-close look at a topic with
current relevance to the field of
active management.
The opinions and forecasts expressed herein are those of the author and may
not actually come to pass. Any opinions and viewpoints regarding the future
of the markets should not be construed as recommendations of any specific
security nor specific investment advice. The analysis and information in this
edition and on our website is for informational purposes only. No part of the
material presented in this edition or on our websites is intended as an investment
recommendation or investment advice. Neither the information nor any opinion
expressed nor any portfolio constitutes a solicitation to purchase or sell securities
or any investment program.
15April 16, 2015 | proactiveadvisormagazine.com
Managing 403(b) referrals in
a tight-knit academic setting
Johnathon Davis
Lexington, KY
Retirement Tax Advisory Group
Retirement Tax Advisory Group Inc. (RTAG) is a Kentucky-based
Registered Investment Advisory Firm. Securities offered through
American Equity Investments, member FINRA and SIPC.
Acquiring new clients has been 100%
referral-based. I do not ask people for a long
list of referral names but rather ask them to
think about people they really care about
who might also need help with their retire-
ment planning. It might be a short list, but
if they have a close bond with that person,
they are more likely to ask if they would be
willing to hear about my approach to their
403(b). So when I call, the person is not just
waiting for my call—they’re expecting to do
business with me when I do see them. That
one referral is worth far more than receiving
random names of associates.
aving attended the University of
Kentucky, I have a great affinity for
the university and do a lot of work
with several employee groups there.
The university has an excellent benefits
plan and matching contribution schedule for
employees. Those employees have over 100
investment options. That is great, and it is
coordinated with basic enrollment education
on the nature of the 403(b) plans and the
investment selection process.
But frankly, no one is designated to help
them actively navigate their way through the
investment decision-making process. This is
where our firm comes in. I have had success
in building a 403(b) client base, especially
among the university’s medical staff. They
are caring, career-oriented people with de-
manding schedules. While concerned about
retirement planning, they have not been able
to devote time to learn about it.
The story of active management has been
my calling card, bringing risk-managed,
quantitative, active investment strategies to
essentially middle-class workers. While their
account balances may not be all that high,
a sound investment approach can make a
huge difference in their retirement outlook
over time.
UK has a strict solicitation policy.
Financial firms cannot advertise their way
to success, which has actually worked to my
advantage as I am good at the one-on-one
process and willing to do a lot of legwork.
I’ve been welcomed by the administration
because they know I am very respectful of
their policies.
H
TIPS & TOOLS

16. Active Management
There is a great deal of confusion surrounding the term “active
management” created by the business press. When one reads a headline
in any given year that “active managers” are underperforming or overper-
forming their benchmarks, this typically is referring to “active” managers
of a mutual fund—who are being measured against a specific index or
competing funds within that style.
Within the field of true active portfolio management, this narrow and
misleading definition really has little significance.
Active investment management is not about exceeding a specific
benchmark or “beating the market.” Active management seeks favorable
risk-adjusted returns in any market environment, generally employing
sophisticated algorithms and models to capture gains and protect against
losses in a wide variety of sectors, asset classes, and geographies.
It is about controlling risk in the markets, finding new ways to
dynamically diversify, and smoothing out the long-term volatility typically
found in any asset class. Active managers tend to rely on quantitative
approaches for asset allocation, exposure to the market, and adjustments
to portfolios based on current market conditions. When it comes to
evaluating returns, they generally will not compare to the S&P 500 or
global total market indexes, but are far more interested in risk-adjusted
returns and in meeting their portfolio objectives.
In theory, it is fundamentally about a long-term approach to portfolio
management that is diametrically opposed to “buy-and-hold.”
Fee-based assets continue to grow among advisors
101
Dynamic
Strategic
Diversification
Tools Models
Strategies
5 reasons to consider active management
Buy and hold is dead(ly)—While bull market runs are impressive,
history shows it is not a matter of “if” but more a matter of
“when” for the next bear market. Investment expert Kenneth Solow
sums it up: “Patiently waiting for stocks to deliver historical average
returns does not rise to the level of an investment strategy.”
Bear market math is daunting—It takes longer than most in-
vestors think to recover from bear markets—a gain of 50% is
needed to overcome a 33% portfolio loss.
Risk first: always—As one prominent active manager has said,
“No one would ever jump into a car without brakes, so why
would investors even consider having an investment strategy that did
not have a strong defense?”
Active management aligns with investor psychology—Behavioral
finance studies have documented the tendencies of investors to
operate on the destructive principles of “fear and greed.” Disciplined
active management takes emotion out of the equation.
Does “set it and forget it” really make sense?—For retirees or
those approaching it, the “sequence of returns” dilemma can
have a devastating effect on future income needs. Active management
offers a prudent path to achieving the twin goals of asset preservation
and compounded capital growth.
Resources for Advisors
Websites
Proactive Advisor Magazine: Active investment management’s weekly magazine, providing
advisor perspectives, topical issues in active management and commentary on strategy and
tactical tools. www.proactiveadvisormagazine.com
National Association of Active Investment Managers (NAAIM): Peer-to-peer networking
in the active investment management community, providing best practices among successful
advisors and advisory firms. www.naaim.org
Market Technicians Association (MTA): Leading national organization of investment analysts,
stock market analysis professionals and certified market technicians. www.mta.org
Advisor Perspectives: Audience-generated and vendor-neutral forum where fund companies,
wealth managers and financial advisors share their views on the market, the economy and
investment strategy. www.advisorperspectives.com
Whitepapers
“Bucket Investing with Dynamic Risk-Managed Portfolios,” Flexible Plan Investments
goto.flexibleplan.com/download/whitepaper-bucket-investing.pdf
“Comparison of ETFs and Mutual Funds—The True Cost of Investing,” Guggenheim Investments
guggenheiminvestments.com/rydex
“Understanding Leveraged Exchange Traded Funds,” Direxion Investments
www.direxioninvestments.com
“Small Accounts, Big Opportunities,” Trust Company of America
www.trustamerica.com/resources
“Why Gold? Seven Enduring Reasons,” Flexible Plan Investments
goldbullionstrategyfund.com
“The State of Retail Wealth Management, 4th Annual Report,” PriceMetrix
www.pricemetrix.com
2011 2012 2013
Fee-Based Assets (% of Total Assets) 25% 28% 31%
Fee-Based Revenue (% of Total Revenue) 43% 45% 47%
Fee Accounts per Advisor 85 92 101
Average Fee Account Assets ($000s) $240 $258 $293
Source: PriceMetrix Insights – The State of Retail Wealth Management 2013 – 4th Annual Report (Aggregated
data representing 7 million retail investors and over $3.5 trillion in investment assets.)