CLEARWATER WEALTH PARTNERS
Client Meeting Transcript
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CLIENT: Chen Household (Sam & Alex Chen)
DATE: June 10, 2020
TIME: 2:00 PM
MEETING: 2020 Q2 Quarterly Review (Virtual)
LOCATION: Video Conference
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TRANSCRIPT
[0:00] Sarah Chen: Good to see you both on screen — I'm glad we can keep meeting
regularly even if we can't be in person. The market has done something remarkable
since March: the S&P has recovered nearly 40% from the March 23rd bottom. Your
portfolio is at approximately $680,000 — much of the March loss is recovered. It's
been a volatile ride, but staying invested was the right call.
[0:04] Alex Chen: The recovery surprised me. I honestly expected things to get
worse before they got better.
[0:05] Sarah Chen: Most people did. Fiscal and monetary stimulus came in at
extraordinary scale — the Fed cut rates to zero, bought assets at levels we've never
seen, and Congress passed trillions in relief. The market looked through the
immediate economic pain and priced in a recovery. That's the nature of
forward-looking markets.
[0:07] Sam Chen: The risk questionnaire you sent — we both did it. Alex scored
58 and I scored 51. What do those numbers mean?
[0:09] Sarah Chen: On our scale of 0 to 100, Alex is in the Moderate growth range
and you, Sam, are at the boundary of Moderate-Conservative. The current 70/28/2
allocation is calibrated to around 65-70 on that scale. The gap suggests you might be
modestly over your actual risk tolerance. I'm proposing an IPS amendment — moving
from 70/28/2 to 60/35/5. The 5% is a alternatives sleeve — we'd use a short-duration
bond fund as a liquidity buffer. This is a meaningful change I want your explicit
buy-in on.
[0:13] Sam Chen: What does 60/35 actually mean for our returns?
[0:14] Sarah Chen: Over long periods, a 60/40-ish portfolio has historically
returned about 1 to 1.5% less annually than a 70/30 — but with meaningfully lower
drawdowns. In something like March, you'd have lost roughly 20% instead of 27%. The
tradeoff is lower expected growth for a much smoother experience. Given your time
horizon and stable income, I think 60/35/5 is appropriate and honest to how you
actually feel.
[0:16] Alex Chen: Let's do it. I think Sam's right — we felt 70% equity more
than we expected to.

[0:17] Sarah Chen: I'll draft the IPS amendment — DOC-IPSAmendment-2020-001 — for
your signatures. We'll rebalance into the new allocation as we process the NLTK vest
this month.
[0:19] Sarah Chen: The NLTK Q2 vest: 625 shares vested June 5th. NLTK was at $13.80
at vest — well down from the $21 level in September. So $8,625 W-2 income. Lower than
prior vests. Per protocol, sold 450 shares, held 175. NLTK concentration at
approximately 4.1% of portfolio — nicely within the cap and actually lower than usual
because the price fell. The rebalance will happen simultaneously with the IPS
amendment execution.
[0:22] Sam Chen: ACCT-CASH — we were at $91,000 in March. Did anything change?
[0:23] Sarah Chen: We've maintained it. You're at $89,000 now — a small drawdown as
you had some family expenses in April, which is completely normal. The home purchase
target hasn't changed. Given everything, I want to keep the 2021 purchase window open
but also give ourselves permission to push to early 2022 if we're not feeling
financially settled post-COVID.
[0:26] Alex Chen: The 2021 timeline still feels right to us. We've been
researching neighborhoods.
[0:27] Sarah Chen: Good. The CARES Act also has some provisions worth mentioning: IRA
withdrawal penalties are waived for COVID-related hardship in 2020. I don't expect
you to need that, but if something changes with income, it's a backstop. No action
needed. Action items: IPS amendment 60/35/5 drafted for signatures by June 30; NLTK
vest proceeds reinvested per new allocation; ACCT-CASH stable — continue
contributions.
[0:30] Meeting adjourned
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ACTION ITEMS
1. Draft IPS amendment (60/35/5) for client signatures — by June 30
2. Rebalance portfolio to new 60/35/5 allocation in coordination with NLTK vest
proceeds
3. ACCT-CASH at $89K — maintain contribution pace toward $110K target
4. Confirm NLTK Q2 vest W-2 income capture for estimated tax modeling
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CONFIDENTIAL — For client use only. Not for distribution.
