Oak Tree WealthManagementDiane L. Woodward, CFP®, RICP®3180 Crow Canyon PlaceSuite 220San Ramon, CA 94583925-275-9400888-965-9550 Faxdiane@oaktreewealth.comwww.oaktreewealth.com

August 2015I'm still alive!!

Five Ways to Manage Risk in YourRetirement Savings Plan

Five Steps to Tame Financial Stress

How important are dividends in the S&P500's total returns?

I'm still alive!!

See disclaimer on final page

Join us on Facebook with a "Like" toreceive updates and information likevideos on identity theft orannouncement of upcoming events.This is another way I try to keep youin the know.Like Oak Tree Wealth Management

Our family hadn't taken a "real" vacation,(defined by me as more than 4 days off), inthree years. So I wanted to treat us all to adream vacation before the twins head off tocollege

We took a cruise for 7 days in Alaska, and thentraveled by bus around the state for 5 moredays. It was a wonderful vacation where ourfamily enjoyed the amazing service, sights andfood aboard the ship. My son, Pierce, reallyenjoyed have fettucini alfredo as an appetizerseveral nights, (oh - to have his metabolism).

We asked our waiter, "Would you recommendthe filet mignon or the salmon?". Then he wouldsay, "I'll bring you both"!!

We also enjoyed hiking, cycling, climbing aglacier with crampons to hold us onto the ice,and a flight around Mt. McKinley.

The company we flew with claimed a perfectsafety record. It was a small plane for up to 7passengers and there was a storm includinglightning. Thank goodness I didn't see thelightening! The flight was rather bouncy, and afew of my guys looked a little less than relaxedat times. It took the pilot a while to find a breakin the clouds so we could actually see the peak,but he did it.

We landed and fun was had by us all.

The following day a similar flight, from adifferent air service to a different sight in Alaskacrashed and everyone was killed.

Not only were we filled with sadness for thefamilies and loved ones of the crash victims,but also we had a rude awakening of howeasily that could have been us.

What would happen to your loved ones if youwere to suddenly pass away?

Could your loved ones find your estate planningdocuments? Are those documents up to date?Would your family be able to find your bankaccounts? Investment accounts? Retirementaccounts? Would there be enough money forthem to carry on without you?

These are never fun things to think about, butthey are important in case you are pulled fromthis earth earlier than you expect. If you needhelp answering these questions, it would be myhonor to walk you through the process.

Ending on a happy note, we really did enjoy ourtrip! If you are considering taking a cruise inAlaska, I'm happy to share the tips I learned onours.

Happy Summer!

Diane

Page 1 of 4

Five Ways to Manage Risk in Your Retirement Savings PlanYour employer-sponsored retirement savingsplan is a convenient way to help youaccumulate money for retirement. Using payrolldeductions, you invest for the futureautomatically, following that oft-noted advice to"pay yourself first." But choosing to participateis just one important step. Another key tomaking it work for you is managing risk in yourportfolio. Following are five ways to tackle thisimportant task.

1. Know your personal risk toleranceGauging your personal risk tolerance--or yourability to endure losses in your account due toswings in the market--is an important first step.All investments come with some level of risk, soit's important to be aware of how much volatilityyou can comfortably withstand before choosinginvestments.

One way to do this is to reflect on a series ofquestions, such as:

• How well would you sleep at night knowingyour retirement portfolio dropped 5%? 10%?20%?

• How much time do you have until you willneed the money? Typically, the longer yourtime horizon, the more you may be able tohold steady during short-term downturns inpursuit of longer-term goals.

• Do you have savings and investmentsoutside of your plan, including an emergencysavings account?

Your plan's educational materials may offerworksheets and other tools to help you gaugeyour own risk tolerance. Such materialstypically ask a series of questions similar tothose above, and then generate a score basedon your answers that may help you chooseappropriate investments.

2. Develop a target asset allocationOnce you understand your risk tolerance, thenext step is to develop an asset allocation mixthat is suitable for your savings goal whiletaking your risk tolerance into consideration.Asset allocation is the process of dividing yourinvestment dollars among the various assetcategories offered in your plan, generallystocks, bonds, and cash/stable valueinvestments. If you're a young investor with ahardy tolerance for risk, you might choose anallocation composed heavily of stocks. On theother hand, if retirement is less than 10 yearsaway and you fear losing money, yourallocation might lean more toward bonds andcash investments.

3. Be sure to diversifyEven the most aggressive investor canpotentially benefit from diversification, whichgenerally means not putting all your eggs inone basket. Let's take one example fromabove: Although that young investor maychoose to put a large chunk of her retirementaccount in stocks, she should still considerputting some of the money into bonds andpossibly cash to help balance any losses thatmay occur in the stock portion. Even within thestock allocation, she may want to diversifyamong different types of stocks, such asdomestic, international, growth, and valuestocks.

4. Understand dollar cost averagingYour plan also helps you manage riskautomatically through a process called dollarcost averaging (DCA). When you contribute toyour plan, chances are you contribute an equaldollar amount each pay period, which thenpurchases shares of the investments you haveselected. This process--investing a fixed dollaramount at regular intervals--is DCA. As theprices of the investments you purchase rise andfall over time, you take advantage of the swingsby buying fewer shares when prices are highand more shares when prices are low--inessence, following the old investing adage to"buy low." After a period of time, the averagecost you pay for the shares you accumulatemay be lower than if you had purchased all theshares with one lump sum.

Remember that DCA involves continuousinvestment in securities regardless of theirprice. As you think about the potential benefitsof DCA, you should also consider your ability tomake purchases through extended periods oflow or falling prices.

5. Perform regular maintenanceAlthough it's generally not necessary to reviewyour retirement portfolio too frequently (e.g.,every day or even every week), it is advisableto monitor it at least once per year and as majorevents occur in your life. During these reviews,you'll want to determine if your risk tolerancehas changed and check your asset allocation todetermine whether it's still on track. You maywant to rebalance--shifting some money fromone investment to another--to bring yourallocation back in line with your target. Or youmay want to make other changes in yourportfolio to keep it in line with your changingcircumstances. Such regular maintenance iscritical to help manage risk in your portfolio.

All investing involves risk,including the possible lossof principal. There can beno assurance that anyinvesting strategy will besuccessful. Investmentsoffering higher potentialrates of return also involvea higher level of risk.

Asset allocation anddiversification are methodsused to manage investmentrisk; they do not guaranteea profit or protect against aloss.

Page 2 of 4, see disclaimer on final page

Five Steps to Tame Financial StressDo you sometimes lie awake at night thinkingabout bills that need to be paid? Does it feel asthough you're drowning in debt? If thisdescribes you, you might take solace in the factthat you're not alone. A recent report releasedby the American Psychological Association(APA) showed that 72% of adults feel stressedabout money at least some of the time, and22% said the amount of stress theyexperienced was extreme.1

The bad news is that stress can be responsiblefor multiple health problems, including fatigue,headaches, and depression. And, over time,stress can contribute to more significant healthissues, including high blood pressure and heartdisease.2 The good news is that there aresome simple steps you can take to reduce oreliminate some of the financial stress in yourlife.

1. Stop and assessThe first step in reducing financial stress is tolook at your situation objectively, creating asnapshot of your current financial condition. Sitdown and list all of your financial obligations.Start with the items that are causing you themost stress. For debts, include the principaldue, the applicable interest rate, and theminimum payment amount. If you're not alreadydoing so, review your bank account andcredit-card statements to track where yourmoney is going. The goal here is not to solvethe problem; it's to determine and document thescope of the problem. You might find that thisstep alone significantly helps alleviate yourstress level (think of it as facing your fears).

2. Talk to your spouseIf you're married, talk to your spouse. It'simportant to communicate with your spouse forseveral reasons. First, you and your spouseneed to be on the same financial page; anysteps you take to improve your situation aregoing to be most effective if pursued jointly.Second, not being on the same page as yourspouse is only going to lead to additionalstress. In fact, the APA report showed that 31%of spouses and partners say that money is amajor source of conflict or tension in theirrelationship.3 Additionally, your spouse orpartner can be a valuable source of emotionalsupport, and this emotional support alone canlower stress levels.4 If you're not married,family or friends might fill this role.

3. Take controlFirst, go back and take a look at where yourmoney is going. Are there changes you canmake that will free up funds you can save orapply elsewhere? Even small changes canmake a difference. And exerting control overyour situation to any degree can help reduceyour overall stress level. Start building a cashreserve, or emergency fund, by saving a littlebit each paycheck. Think of the emergencyfund as a safety net; just knowing it's there willhelp reduce your ongoing level of stress. Workup to a full spending plan (yes, that's anotherway of saying a budget) where you prioritizeyour expenses, set spending goals, and thenstick to them going forward.

4. Think longer termLook for ways to reduce debt long term. Youmight pay more toward balances that have thehighest interest rates. Or you might considerrefinancing or consolidation options as well.Beyond that, though, you really want to startthinking about your long-term financial goals,identifying and prioritizing your goals,calculating how much you might need to fundthose goals, and implementing a plan thataccounts for those goals. Having a plan inplace can help you with your stress levels, bothnow and in the future.

5. Get helpAlways remember that you don't need to handlethis alone. If the emotional support of a spouse,friends, or family isn't enough, or the level ofstress that you're feeling is just too much, knowthat there is help available. Consider talking toyour primary-care physician, a mental healthprofessional, or an employee assistanceresource, for example.

A financial professional can also be a valuableresource in helping you work through some ofthe steps discussed here, and can help directyou to other sources of assistance, like credit ordebt counseling services, depending on yourneeds.

The most important thing to keep in mind is thatyou have the ability to control the amount offinancial stress in your life.1,3,4 American Psychological Association,"Stress in America™: Paying with Our Health,"www.stressinamerica.org, February 4, 20152 Mayo Clinic Staff, "Stress Symptoms: Effectson Your Body and Behavior,"www.mayoclinic.org, July 19, 2013

Seventy-two percent ofadults report feelingstressed about money atleast some of the time, and22% say that the amount ofstress they experience isextreme.

Source: AmericanPsychological Association

Page 3 of 4, see disclaimer on final page

Oak Tree WealthManagementDiane L. Woodward, CFP®,RICP®3180 Crow Canyon PlaceSuite 220San Ramon, CA 94583925-275-9400888-965-9550 Faxdiane@oaktreewealth.comwww.oaktreewealth.com

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2015

California Insurance License#0785820. Diane Woodward is aregistered representative with andsecurities, advisory services andfinancial planning offered throughLPL Financial, a RegisteredInvestment Advisor, MemberFINRA/SIPC.

Are stock dividends reliable as a source of income?Dividends can be an importantsource of income. However,there are several factors youshould take into considerationif you'll be relying on them to

help pay the bills.

An increasing dividend is generally regarded asa sign of a company's health and stability, andmost corporate boards are reluctant to cutthem. However, dividends on common stockare by no means guaranteed; the board candecide to reduce or eliminate dividendpayments. Investing in dividend-paying stocksisn't as simple as just picking the highest yield;consider whether the company's cash flow cansustain its dividend, and whether a high yield issimply a function of a drop in a stock's shareprice. (Because a stock's dividend yield iscalculated by dividing the annual dividend bythe current market price per share, a lowershare value typically means a higher yield,assuming the dividend itself remains the same.)

Also, dividends aren't all alike. Dividends onpreferred stock typically offer a fixed rate ofreturn, and holders of preferred stock must bepaid their promised dividend before holders ofcommon stock are entitled to receive theirs.

However, because their dividends arepredetermined, preferred stocks typicallybehave somewhat like fixed-incomeinvestments. For example, their market value ismore likely to be affected by changing interestrates, and most preferred stocks have aprovision allowing the company to call in itspreferred shares at a set time or at a specifiedfuture date. If you have to surrender yourpreferred stock, you might have difficulty findingan equivalent income stream.

Finally, dividends from certain types ofinvestments aren't eligible for the special taxtreatment generally available for qualifieddividends, and a portion may be taxed asordinary income.

Note: All investing involves risk, including thepotential loss of principal, and there can be noguarantee that any investing strategy will besuccessful. Investing in dividends is a long-termcommitment. Investors should be prepared forperiods when dividend payers drag down, notboost, an equity portfolio. A company's dividendcan fluctuate with earnings, which areinfluenced by economic, market, and politicalevents.

How important are dividends in the S&P 500's totalreturns?In a word, very. Dividendincome has representedroughly one-third of the totalreturn on the Standard &

Poor's 500 index since 1926.*

According to S&P, the portion of total returnattributable to dividends has ranged from a highof 53% during the 1940s--in other words, morethan half that decade's return resulted fromdividends--to a low of 14% during the 1990s,when the development and rapid expansion ofthe Internet meant that investors tended tofocus on growth.*

And in individual years, the contribution ofdividends can be even more dramatic. In 2011,the index's 2.11% average dividend componentrepresented 100% of its total return, since theindex's value actually fell by three-hundredthsof a point.** And according to S&P, the dividendcomponent of the total return on the S&P 500has been far more stable than price changes,which can be affected by speculation and ficklemarket sentiment.

Dividends also represent a growing percentageof Americans' personal incomes. That's beenespecially true in recent years as low interest

rates have made fixed-income investments lessuseful as a way to help pay the bills. In 2012,dividends represented 5.64% of per capitapersonal income; 20 years earlier, that figurewas only 3.51%.*

Note: All investing involves risk, including thepotential loss of principal, and there can be noguarantee that any investing strategy will besuccessful. Investing in dividends is a long-termcommitment. Investors should be prepared forperiods when dividend payers drag down, notboost, an equity portfolio. A company's dividendcan fluctuate with earnings, which areinfluenced by economic, market, and politicalevents. Dividends are typically not guaranteedand could be changed or eliminated.

*Source: "Dividend Investing and a Look Insidethe S&P Dow Jones Dividend Indices,"Standard & Poor's, September 2013

**Source: www.spindices.com, "S&P 500Annual Returns" as of 3/13/2015

Page 4 of 4