About Pacific Park Financial, Inc.
Who Are We?
Pacific Park Financial, Inc. is a Registered Investment Adviser with the SEC. We provide asset management for individuals, families and businesses throughout the United States and abroad.
We are quite different from those firms that sell products and charge commissions. We are fee-only advisers, committed to providing a genuine service for a fair price.
Our mission at Pacific Park is to treat your money with personal care. In fact, we invest your dollars the way that we invest our own money. We place your needs and desires at the forefront of every investment decision that we make.
Our approach to reducing risk and avoiding big losses resonates with investors, particularly those who have been devastated by previous market catastrophes. In fact, our clients cherish the peace of mind that comes with insuring against disastrous consequences.
- Active Risk Management – Did buy-n-hold work for you? Or did you find yourself losing HALF (-50%) of your retirement assets in 2000-2002 and/or 2007-2009? Don’t let a large institution stick your money in a pre-determined “asset allocation” model with promises of “diversification.” You require an approach to minimize the risk of severe losses in bear markets. We lower portfolio risk when fundamental, technical and economic indicators flash warnings signs. We restore target allocations when those same indicators show signs of improvement.
- Extraordinary ETF Expertise – Gary Gordon has distinguished himself as an authority on the use of Exchange-Traded Funds (ETFs). He is a well-regarded speaker at ETF conferences as well as a frequently quoted resource for the financial media, including the Wall Street Journal. He is one of the most widely read ETF writers, with commentary appearing at popular portals like Seeking Alpha, Investors.com, ETF Trends and ETF Expert. What’s more, Gary’s participation on local and national talk radio spans 15 years.
- Fee-ONLY Investment Management (NOT fee-based or commission-based) – Many brokers or specialists earn dollars in the form of sales commissions. Commission-based advisers receive compensation for selling you products which may not be right for you. In contrast, a “Fee-Only” adviser earns a straightforward fee for managing dollars on your behalf.
- Certified Financial Planners™ – The Certified Financial Planner™ or CFP® designation is one of the most sought after credentials in the financial services industry. CFP® education requirements include extensive knowledge of estate planning, taxation, retirement planning, insurance, investment and general financial planning principles. CFPs have a fiduciary obligation to treat your money with the highest level of guardianship, placing your interests as a client first.
- Personalized Attention, Unparalleled Service – Mammoth investment firms with tens of billions in assets may pay “lip service” to client care. Unfortunately, when there are scores of employees in a pyramid-like hierarchy, personnel may not be able to attend to your needs the way that you deserve. In contrast, Pacific Park Financial, Inc. is small by design. Gary Gordon and Rob Charette are remarkably accessible. Whether by phone, office visit, e-mail or “Skype,” we will do everything in our power to be there for you.
Our clients are successful people. Yet they recognize that they may not have the time, desire, discipline and/or knowledge to manage their investments on their own. They delegate the responsibility to us to keep their portfolio on the right path and to feel more comfortable about their financial well-being.
What is Our Philosophy?
Successful investing is not about picking the next Apple, Facebook or Google. It is not about beating the market one year… only to be crushed by the market the next. Successful investing is about what you can control.
Can you decide the direction of interest rates? The price of oil? The well-being of the economy? Can you determine the impact of a government’s laws or the amount of a corporation’s profits?
The truth is, you don’t have a lot of control over the things that may or may not affect your investments. And that can be pretty scary. On the other hand, you do have the power to control how much your investments will cost (expense) and how much they will pay you (yield).
You also have the power to determine the outcome on every investment that you will ever make. There are only 4 possible outcomes — a big gain, a small gain, a small loss and a big loss. The successful investor uses a variety of investment techniques to ensure a big gain, small gain or small loss, avoiding the only bad outcome (i.e., the big loss).
Lowering Your Investment Costs:
The lower your investments costs are, the higher your investment returns will be. One reason that we frequently use exchange-traded funds (ETFs) is because they tend to carry the lowest internal expense ratios. For example, a portfolio filled with index-based ETFs might average 0.3% to 0.5% annually whereas a portfolio of traditional stock mutual funds might average 0.9%-1.1% per year.
Not sure if 0.6%-0.8% in savings will make a huge difference in your ultimate success? Imagine the tens of thousands of dollars that one saves when he/she refinances a mortgage down to 4.25% from 5.0%. Lowering the costs within your investment portfolio provides a huge monetary benefit.
Raising Your Investment Yield:
The higher the overall yield from your total portfolio, the greater your investment returns will be. Does that mean you should chase an asset that boasts the highest dividend payout or largest coupon payment? Not at all. It simply means that the more interest or dividend income you accumulate, the less you need to risk in stocks that are only able to provide price appreciation.
Some folks mistakenly assume that they need growth-oriented stocks to soar — year after year — to achieve their long-term goals. Yet, successful investors understand that a wide range of lower risk assets (e.g., Dividend ETFs, Preferred ETFs, Covered Call CEFs, etc.) can contribute to lucrative results.
Controlling Investment Outcomes:
There are only 4 outcomes that you can experience as an investor: (1) a big gain, (2) a small gain, (3) a small loss and (4) a big loss. Three of the outcomes are good!
Intuitively, investors understand that gains are good… the bigger, the better. Yet the small loss is one of the most powerful instruments in your toolbox.
A small loss gives you an opportunity to exchange an underachiever for a more powerful performer. In addition, small losses can offset gains in a taxable account, lowering the overall taxes you have to pay. Remember the old adage… it’s not what you make, it’s what you keep.
Still, the most important reason to embrace a small loss is to avoid the big loss. You can ruin everything you’ve tried to achieve with one big mistake, just as sure as one bad apple spoils the whole bunch.
We do not let one apple spoil your basket. When technical, fundamental and economic warning signs materialize – when threats to your asset mix are escalating – we take specific actions to reduce your exposure to downside risk.
Think about it. When do you really need the experience and expertise of an investment adviser? Have you had a lot of trouble when investment markets were climbing? Or have you had the most trouble keeping your money when the markets were plummeting?
We offer a unique understanding of how and when to sell. Naturally, we’re skilled at knowing which assets to buy and when to acquire them. Nevertheless, what sets us apart is our dedication to downside risk management.
Managing Downside Risk:
Many brokers, advisers and planners merely place you in an asset allocation model — 60% stock/40% bond, 70% stock/30% bond, 50% stock/50% bond. They tell you that diversifying across asset classes like stocks and bonds is the best way to protect yourself.
THAT IS NOT RISK MANAGEMENT!
In fact, the “pick-a-portfolio” approach resulted in extreme losses for most investors in the 2000-2002 tech wreck as well as the 2007-2009 financial collapse. “Hold-n-hope” even failed portfolios that had the recommended exposure to foreign stocks in Europe and emerging markets during 2011 euro-zone’s crisis.
In contrast, we are risk managers who actively guard against the possibility of big losses. That’s what risk is… the possibility of loss. You can’t “diversify” or “asset allocate” or “stock pick” your way around catastrophe. You need to take measures to sidestep financial devastation from occurring in the first place.
We use a wide variety of tools to protect our clients when the need for capital preservation increases. For example, when breadth is deteriorating across the entire stock space – when more and more individual stocks are faltering – we understand that the popular benchmarks will not be far behind. We also monitor prices in relation to critical moving averages. In addition to technical tools, we track fundamental valuation to determine when stock prices are severely overpriced. We evaluate the economic landscape. We even watch credit spreads to decide whether risk aversion is taking hold.
Even when the broader technical, fundamental and economic signals are primarily constructive, we still maintain a front-line level of risk management through the use of limit orders as well as hedges. Limit orders and hedges help to secure a big gain, small gain or small loss, eliminating the one unacceptable outcome, the big loss.
In sum, whether we lower the overall risk of loss with a tactical decision to modify a portfolio’s exposure, or whether we hedge against the ownership of a particular asset, or whether we employ a limit order approach to place proceeds of a sale in cash/cash equivalents, our aim is to control what an investor is able to control. What can an investor control? The outcome of every buy decision.
We recognize that no matter the business, industry or market… data drive the world of investments. Yet, there are no guarantees regarding the type of data that will have the most influence on price behavior.
Are fundamentals superior? Corporate earnings, cash flow, revenue growth and valuation ratios certainly provide insight. Technicals? Chart patterns, relative strength and key moving averages can be remarkably useful. Contrarian tools? There is a lot to be said when others are too fearful or too greedy as shown by the put-call ratio, bull-bear sentiment and CBOE Volatility Index (VIX). Historical assessments? There’s plenty of evidence to show the power of seasonal shifts as well as patterns repeating themselves. What about the economy? Investigating tax rates, commodity demand, money supply, manufacturing growth, currency fluctuations and unemployment can be pretty eye opening.
The fact is, we consider a wide variety of data. By turning our attention to a range of information – historical, technical, fundamental, economic, contrarian, etc. – we are able to acquire a more complete picture of the items affecting market-based securities.
In the 10/02-10/07 bull market, the decline of the U.S. dollar, the economic growth rates of emerging markets, and the profitability of foreign companies suggested a larger-than-usual allocation to emerging markets and foreign stocks. Even domestically, the price momentum for energy and materials called for “over-weighting” those sectors. The selection decisions benefited the client base during the 5-year uptrend.
In the current uptrend that began in March of 2009, aggressive Federal Reserve policy, a stable consumer-oriented economy and demographics/laws surrounding U.S. health care pointed to a larger-than-usual allocation to U.S. stocks. The price momentum for information technology and health care called for “over-weighting” these sectors, while under-weighting or eliminating foreign exposure.
The extensive review of different types of data increases the probability of successful outcomes. Indeed, our knowledge of fundamental, technical, historical, contrarian and economic metrics makes it possible to secure desirable gains. Yet the tide can turn quickly. As risk-oriented asset managers, we participate in market-based security ownership, while actively protecting against the possibility of a big loss.
When Did We Begin?
Pacific Park Financial, Inc. began providing fee-only investment advisory services in 2002. Beyond the company itself, Gary Gordon has 25 years of financial services experience and Rob Charette has 16 years of financial services experience.
Gary Gordon, President:
Our firm’s founder and president, Gary Gordon, was born and raised just outside of White Plains, NY. Gary’s great grandfather and other family members were Jewish immigrants who came through Ellis Island from Russia.
Gary’s grandfather, it was known, lost most of his savings during the Stock Market Crash of 1929 and the Great Depression. The discussions had a lasting impact on Gary.
During the summer months of 1986 as well as the bulk of 1987, Gary lived and worked in Taiwan. There he got to see firsthand the emergence of a financial bubble as well as its eventual bursting. The losses that people suffered were far worse than the losses endured in the October 1987 crash stateside. It was as though Gary had been witnessing circumstances that were similar to his family’s experiences in the late 1920s and 1930s.
After the completion of his Masters of Science at San Diego State University in the early 90s, Gary landed a job in Hong Kong working for a large, multi-national insurance company. Signs of questionable business practices designed to boost share prices convinced Gary that busts were as inevitable as booms. So he set out to monitor fundamental, technical and economic trends as a way to mitigate the risk of severe financial losses during an eventual catastrophe (a.k.a. “tail risk” or “black swan event”).
After returning from a variety of work locations in Southeast Asia, Gary returned to the U.S. to start his family. He joined a financial firm that engaged in both newsletter guidance as well as money management. By 1998, Gary became the resident CFP and co-host (a.k.a. the “G-Man”) on a national financial talk radio show. At the time, the dot-com “New Economy” as well as stock overvaluation provided Gary with a unique forum to explain the fundamental, technical and economic risks to a massive listening audience.
At first, most callers to the live radio format simply wanted “picks” with 4-digit ticker symbols on the NASDAQ. It was like reliving shoe-shine boy recommendations of the late 1920s or the taxi-cab driver tips in 1987 Taiwan. Their willingness to dismiss ludicrous stock valuations and deteriorating market breadth in the hope that a complete commitment to the hottest names in tech would make them rich was familiar.
Gary warned his listeners of the possibility of falling stock prices. Likewise, he encouraged investors to adopt many of the same unemotional/mechanical strategies that he was using with his own investments.
The tech wreck (a.k.a. “dot-com disaster”) decimated investors over two-and-a-half years between 2000 and 2002. Suddenly, Gary’s guidance to apply insurance principles to the investing process resonated. Listeners wanted to learn more about Gary’s approach, and some of them requested “hands-on” help with their assets.
Gary started to manage money actively for clients in 2002. That’s when a different kind of investment advisory practice was born.
Rob Charette, Vice President:
Rob began his financial services career in 1999. He started as an analyst for the money management arm of the same family group where Gary had been working. The 10-year age difference notwithstanding, the two formed a quick bond on everything from economics to financial markets.
Rob gained invaluable experience in operations, copy writing as well as active portfolio management. He even had the opportunity to co-host a separate talk radio program in 2005. Over the course of seven years, he worked his way up to a vice president role.
With Rob’s services very much in demand, he began to explore possibilities at a variety of national investment firms. He took a high profile role in November of 2007 and had been assigned to manage two offices in the greater Los Angeles area for a multi-billion dollar Registered Investment Adviser.
It was at his new company where Rob witnessed the darker side of the business. Where he had assumed that the gigantic entity would have more resources and be able to provide more value to his customers, the exact opposite turned out to be true. In fact, he soon discovered that he held little sway as a “senior investment adviser.” Rob learned that he had been expected to dutifully report up the hierarchy and that he would not be able to make independent decisions; rather, the company’s expectation was that he act as a salesperson, not as an adviser.
Rob quickly realized that the only investment decisions being made on client portfolios came from behind closed curtains at the highest level of the hierarchy based in the mid-West. “Advisers” could not question those investment decisions. And when clients sought clarity on the thought process, advisers had been told to provide the same “canned” explanations to everyone.
More troubling, the firm had a handful of preset/static asset allocation models. Client individualization was nonexistent. Worse yet, there were zero plans to reduce the risk of loss. That proved particularly devastating during one of the worst market meltdowns of record – the Global Financial Crisis (10/07-3/09).
It did not take long before Rob grew weary of the mega-firm’s asset allocation assembly line. Specifically, the assets chosen were meant to be held no matter the environment and no matter the harm they might cause client portfolios. Meanwhile, resources at the mega-firm had been primarily allocated to the acquisition of new business, rather than investment research and personalized care. Rob longed for the day when he could provide the service that he once took great pride in.
Later, in January of 2010, he got his wish. Rob was able to transfer to a boutique wealth management and financial planning firm in Pasadena. Although he was back doing the things that he loved, he was doing it 90 minutes from home. The commute alone made it particularly difficult for the self-proclaimed family man.
Throughout the years, Rob kept in touch with Gary. He grew fond of Gary’s rapidly growing Registered Investment Adviser with the SEC based in Orange County. And then the opportunity opened up. Gary learned in December of 2011 that he would have an opening and Gary didn’t hesitate. Pacific Park Financial, Inc. enthusiastically extended Rob an offer that he could not refuse… do what you love, do it with Gary and do it close to home.
Where Do We Manage Money?
Pacific Park Financial, Inc. favors the discount broker model. Custodians that offer discount brokerage services not only offer one of the lowest cost structures for investing, but they foster independence in the asset management firms that employ them. That is why we use TD Ameritrade as the custodian for investment advisory services.