This newsletter was named after a diversified investment program for managed accounts. FSG’s Diversified Sector Program seeks to capture 70% of the gains of a rising stock market and avoid 70% of the losses when the market declines. It is intended for clients who desire long term investment returns similar to the S&P 500 Index, with reduced volatility. The program was originally designed for qualified plans such as retirement accounts and certain trusts (some taxable accounts may be unsuitable). We invest in industry specific, sector mutual funds. We never purchase individual stocks although we will invest in industry specific Exchange Traded Funds. The diversified portfolio only invests in sectors that meet our proprietary criteria for being relatively undervalued at time of purchase. Most of the funds are part of the Fidelity Select family. Although this program is designed to reduce short-term volatility, we advise against investing in this or any other equity program for less than three years. Unlike market timing programs, this diversified investment program is rarely 100% invested or 100% in money market funds. We also offer our Fixed Income Sector Program for more conservative investors. As with any investment program, past performance does not guarantee similar future results.
Investment opinions expressed in the newsletter are based on the analysis of Clyde E. Kendzierski, a Managing Director and Chief Investment Officer of Financial Solutions Group LLC. FSG LLC is an Investment Advisor registered with the Securities and Exchange Commission. Mr. Kendzierski is also a registered investment advisor and holds a Masters Degree in Economics. Since the mid-1970’s he has been employed by major California banks as a money manager and bond trader, managing accounts as large as 1.7 billion dollars. Following the largest municipal bankruptcy in history (Orange County, California), he was appointed to the Treasury Oversight Committee to establish investment policies to prevent similar debacles in the future. He created the 70% Solution investment program in the early 1980’s for management of his personal retirement funds.
Managed accounts generally reflect the results of the model portfolios published in the newsletter. However, individual results will reflect the client’s unique mix between the diversified and fixed income strategies (adjusted for fees, which vary with account size). The program is offered through NASD registered broker-dealers. Clients’ funds are held in custody at a subsidiary of Fidelity Brokerage. The Advisor is given limited trading authority, but never takes possession of client funds.
Financial Solutions Group, LLC publishes The 70% Solution newsletter, plus special Investor Alerts.