July 17, 2019

VALUE INVESTING AND WEALTH PRESERVATION

Financial advisor Albert Alan Aizin builds valued-based portfolios for his clients in the same way he takes care of his body and mind.

By Rick Weinberg, Editor, California Business Journal

Three days a week at 4 p.m., Albert Alan Aizin, a financial wealth advisor, goes to the gym for a spirited 1 ½ hour workout.

“People who go to the gym consistently are usually serious about their health and are in pretty good shape,” he says.

Additionally, every morning Aizin eats a bowl of gluten-free oatmeal and raw almonds. He also takes two scoops of Superfood, a powerful raw organic sprout blend that contains 12 powders such as alfalfa, barley, spirulina and buckwheat. He pours it into an eight-ounce glass of water and quickly gulps it down.

“It doesn’t look very good and it doesn’t taste very good, but I know it’s great for me and my body so I take it religiously every day,” says Aizin, who also believes in daily consumption of ginseng, ginger, turmeric, Emergen-C, apple cider vinegar, echinacea and vitamin D.

Aizin’s nutritional and health philosophy mirrors his attitude toward the value-based investment portfolios he constructs for his stable of clients.

“I’m big on health and nutrition,” he says. “I believe there is a big connection between health and the way people should construct their portfolio. Being healthy and fit is the same way you should look at your portfolio. To me, creating a portfolio that is properly structured is the same thing as being on a good, healthy diet and taking care of your body and mind.”

Aizin pauses for a moment and quickly adds, “It’s like going to the grocery store. There are thousands of food items to choose from but many of them are processed and are not healthy for you. So it is our job to sift through all the items and fill the cart with some healthy and nutritious food. When you look at the Global Stock Market, there are approximately 63,000 publicly-traded companies. A true value investor may only be interested in one percent of the companies listed and only if they can be purchased at the right price. The next step is being patient and letting the market come to you.”

Aizin, who is President and CEO of Advanced Planning Financial and Estate Services in Laguna Hills, California, has been health conscience since he was a teenager. During a surfing trip to Mexico, he contracted Montezuma’s Revenge from a parasite in the drinking water. When he returned to the U.S., he was horribly ill. A homeopathic doctor took a blood sample and placed it under a microscope for Aizin to see the actual bacteria.

“It resembled a microscopic dragon fly,” he recalls. “The doctor gave me a homeopathic alternative for the illness and boom — I was cured. So from the age of 15 on, eating healthy and homeopathic remedies were on my radar. My mom was on a macrobiotic diet of salads, proteins, rice and vegetables – our house always smelled of herbs. So it was engrained in me early on how to eat healthy and why it’s important.”

Aizin’s passion and commitment to value-based investing began in 2003.

“I recall thinking many times about Warren Buffet’s success and wondering, ‘What is this guy doing differently?’”

It turned out to be value investing.

Buffett was a student of Benjamin Graham, who is considered by many to be the father of value investing. Seth Klarman, who is sometimes referred to as the Warren Buffet of his generation, summed up value investing nicely in his book titled Margin of Safety:

“Value investing is the discipline of buying securities at a significant discount from their underlying values and holding them until more of their value is realized. It calls for buying at a bargain and selling when you think it is the best time to.”

Aizin notes, “In my experience, many Financial Advisors do not focus on the qualities of Value Investing.” If value investing is so great, Aizin is asked, why are many financial advisors ignoring it?

“We as humans do not generally do what is best for us,” he says. “We do what we want to do as opposed to what we need to do. An example of this is 70 percent of all people ages 55 and older have never sat down with an advisor and created a financial plan. They know it is important yet have not done so.

“People aren’t driven logically,” he says. “They’re driven emotionally.”

“Growing up as a child I was good with numbers thanks to my grandfather who consistently gave me math problems to solve,” Aizin says. “He’d show me a trick like how to multiply 25×25: You drop a one and now you have 3×2 = 6 and you add 25 to the number, and you get 625, which is what 25×25 is.

“You can do that trick with any two equal numbers that end in 25. I thought it was genius. My grandfather was always giving me these types of equations. It was interesting to me; it got my brain to work and helped me problem solve.”

He was only seven years old at the time.

His grandfather was influential in helping him see the world with a unique perspective for such a young boy.

“Because of him, I became fascinated as to what makes the world and people different — what makes them tick,” Aizin says. “I was really interested in what makes someone more successful than someone else – and what inspires them to be great. Because of that, I became a visual person and numbers to me were a good representation of something powerful.”

When Aizin speaks of his grandfather and mother; his face glows with joy, pride and love. “My grandfather passed away at age 95, and I intend to celebrate his life by reaching 95 as well.”

“He meant the world to me, just like my mom does today,” he says. “They’re my role models, my mentors. My grandfather had amazing passion and was excited about everything he did. That had a great impact on me. He always told me stories, and sang out loud.

“My mom is my spiritual mentor. Her spirituality resonated with me when I was very young and it has always stayed with me. Having great role models and mentors inspired me to go out on my own.”

Aizin’s wife Lillian and their young son Nicholas have also had a huge impact on his life and career.

“My wife and son are amazing,” he says. “Lillian is a beautiful, loving person with so much great, positive energy. And our son – well there’s nothing better in life than walking in the door after a long day at work and hearing Nicholas yell, ‘Dad!’ It’s one of the best moments – if not the best – moment of my day. My wife and son are my heartbeat. They’ve helped make me the man I am today.” Nicholas turned 6 recently and is very much into Geography. He has a photographic memory and can name over 80 countries and locate all 50 states on the map just by looking at their outline. Amazingly, Nicholas has also memorized all of the US Presidents. When we have friends over, I ask them to pick a number and Nicholas correctly identifies what President that number is associated with.

Value investing makes sense:

The philosophy of value investing is finding investments that are selling below intrinsic value — meaning that if you look at a company and it is selling for less than its assets, you’re getting the company at a discount.

Yet for value investing to work, you need to be patient and disciplined, Aizin is quick to point out.

“What I’ve learned during the last 18 years is that investing is a marathon, not a 50-yard dash,” he says.

“A good value manager will hold an investment for typically five to seven years or even longer. A good value portfolio has low turnover. The managers don’t go in and out of stocks all the time. This isn’t day trading. You need time and patience.” Another quality I look for is for the value manager to have a good portion of their own money in the investment. It is a great vote of confidence to have money in the portfolio you manage. As we say in our industry, “It is important to eat your own cooking.”

Since value managers are attracted to only a small percentage of companies in the Global Stock Markets, they can sit back, be patient and wait for the stock to hit their price — the right price — and then they jump on the opportunity.

“Value investors are very disciplined,” Aizin says. “They simply want to buy stocks at a discount. They won’t overpay for it.

“The bottom line is value investing has amassed great fortunes for investors like Warren Buffett, Seth Klarman, and many others. That’s why we believe value investing should be an integral part of a well- diversified portfolio for investors who want exposure to equities and who possess the correct risk profile.”

“When constructing a Financial Plan, we recommend merging the principles of Value Investing with the principles of Wealth Preservation.” A Wealth Preservation Plan should touch on 4 distinct Zones which represent different phases of our investment lives. The 4 distinct Zones include:

  • Zone 1 – Create and Grow Wealth

During this time in our Investing Life we are contributing money to our pensions, IRA’s and 401K’s. During this time, we focus on the contributions and the interest rates that our investments are earning. Most clients tell us that the majority of their time spent with their current or past advisors was focused on this Zone.

  • Zone 2 – Protect and Preserve Life Savings

While creating and growing Wealth is an important phase of our investment life it certainly is not the only phase. As we get into our 50’s and 60’s people invariably turn to concerns about protecting and preserving their life savings. Studies show after a person reaches age 50, their risk tolerance goes down a notch and they focus more on Capital Preservation.

  • Zone 3 – Plan for Retirement Distribution in the most Tax Advantageous manner while living

As people start to approach their retirement years, planning for retirement distribution in the most tax advantageous manner possible becomes a huge priority. The amount of money that we pay in taxation can change completely the quality of the retirement income we have. With taxes possibly poised to go up in the years ahead many people believe that making positive steps now to eliminate and mitigate taxation in retirement is a critical goal.

  • Zone 4 – Plan for a Life Legacy

Lastly, most people tell us they want to pass on legacies to their children and grandchildren in the most tax advantaged manner possible. Mitigating and eliminating heavy, immediate and unnecessary taxation that can erode a lifetime of savings is a major goal of many of our clients.

For a complimentary review of your current financial goals and objectives please call our office at 949-474-8440. We look forward to meeting with you and learning more about what is most important for you to accomplish over the next two to three years as well as the Legacy you would like to share with others.

Albert Alan Aizin, President and CEO

Advanced Planning Financial & Estate Services

25411 Cabot Road Suite 209

Laguna Hills, CA 92653

Phone: 949-474-8440 / Fax: 800-826-5440

E-mail: aaizin@theretirementgroup.com

www.AdvancedPlanningFinancial.com

Value Investing is not appropriate for all investors and there is no guarantee that it will outperform other investment strategies. All investing involves risk including the potential loss of principal. Past performance is no guarantee of future results.

Securities offered through FSC Securities Corporation, Member FINRA/SIPC. Investment advisory services offered through The Retirement Group, LLC, a Registered Investment Advisor not affiliated with FSC Securities Corporation.  Advanced Planning Financial and Estate Services is a Marketing Name. CA Insurance License #0C78429

 

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