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In a past article we discussed the concept of asset protection being, at its core, a strategy for risk management.  In our last article, we talked about institutional risk, and there is one salient point that is worth reiterating:  In order to manage risk, you first have to identify risk.  One reason that it’s even necessary for us to point out the idea of institutional risk is that most people aren’t aware that it exists . . . even after the failure of Lehman.  Part of that is a false sense of security about things like FDIC insurance.  Sure, the FDIC raised its coverage to $250,000, but you are aware that it has 99 years to repay you if your bank fails?  What that means for us is simply that the FDIC, like so many other perceived safety nets, is nothing more than an illusion.  Well, a nice looking sticker on your bank’s door, in the case of the FDIC.

Unknown Market Risks

Here’s the reality, if you are invested in liquid markets (e.g. stocks and bonds), you are taking risk.  You can pick the fasting growing, lowest P/E company out there, but the truth is that the stock’s performance is at least somewhat tied to the overall market.  No matter how good a company’s management team is, there is very little that anyone can do about the macro-economy.  This simply means that all investments are subject to market risk on two levels: The macro level (overall domestic and now global economic conditions), and the micro level (ability to compete in a niche and generate high marginal profits that attract long-term investors).

Managing Your Own Portfolio

Many of our clients are investors, and many of them manage their own portfolios.  “Home gamers” are people who like to assess risk and allocate assets, but they are at a disadvantage in many cases, because they are often competing for returns against Wall Street professionals who are trained to do one thing: Get your money!  Remember, it’s a zero-sum-game.  For every winner, there is a loser.

Despite the fact that many do-it-yourself investors are sophisticated professionals, it’s surprising to find out how many of them are “long only” investors–how many of them don’t even know that going short (or selling assets that you don’t own in anticipation of the market falling) is even an option.  This type of knowledge is one advantage that professional money managers have over the typical individual investor.  It is a huge risk to invest when you don’t know what you don’t know.

If you’d like to learn more about investing your cash with an asset protection, risk management mindset, call Lodmell & Lodmell today.  We’ll be happy to discuss the options with you.

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Pashmina Lalchandani

CEO & Co-Founder, Bar & Cocoa / Owner, Flow Simple
December 9, 2010, Douglass was a client of Pashmina’s

I’ve known Doug in many contexts, as a friend, as a client and as a business partner and he impresses me on all levels. He’s dependable, smart, generous and I wouldn’t hesitate recommending him and his law firm to anyone.
He’s the best and most ethical lawyers providing asset protection with rock solid strategies to give you peace of mind about your wealth. Straight forward, and straight talk. Doug is exactly the lawyer I want on my side. If I send someone to Doug, I know they’ll thank me for it!

Social & Solar Entrepreneur, Pan Afrikan Theorist, Translator/Interpreter,
Founder & Visionary Leader @ Afrikanpride.
March 12, 2011, Marlon E. D. J. worked with Douglass but at different companies

Doug is one of the most powerful thinker i have came across. During the short time that i have known Doug he has been a great source of inspiration. He has a simplistic yet effective and accurate way to analyze anything you bring to his attention, and then by asking you key questions he gets you to see the light at the end of the tunnel. Besides being extremely bright, he is a genuine and caring individual which is why I feel fortunate to know him. I can say without a doubt that he his the person you would want to talk to if you were in need of a person with his expertise.
Most of the lawyers out there will probably meet your needs, but if you are looking for someone to exceed your expectations and give you that wow factor, look no more he is the person for the job.

Patricia Salter

Associate Dentist at Smileology
December 1, 2010, Patricia was a client of Douglass’

I have been a client of Douglas Lodmell’s since 2001. My main concern was asset protection in this litigious society. I can sleep alot better at night knowing I have the instruments in place to protect the fruits of my labor, and that they will not end up in the hands of a slick trial attorney.

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