CLEARWATER WEALTH PARTNERS
Client Meeting Transcript
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CLIENT: Chen Household (Sam & Alex Chen)
DATE: March 16, 2022
TIME: 2:00 PM
MEETING: 2022 Q1 Quarterly Review
LOCATION: Conference Room A, Clearwater Wealth Partners
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TRANSCRIPT
[0:00] Sarah Chen: The rate environment is shifting fast. The Fed raised rates for
the first time since 2018 at last week's meeting — 25 basis points, with six or seven
more expected by year-end. The S&P is down about 5% year-to-date, and bonds are under
pressure too — the Bloomberg Aggregate is down about 6%, which is unusual. Your
portfolio is at $910,000. The 60/35/5 allocation means the bond sleeve is seeing some
price pressure, but you're absorbing it better than a more bond-heavy portfolio
would.
[0:05] Alex Chen: The strategy review deck you emailed before the meeting — I
noticed the fee schedule still shows 1.00% flat. I thought we updated this last year.
[0:07] Sarah Chen: Good catch, Alex, and I'm glad you flagged it. That was a
template error — the fee schedule was updated in July 2021 and
DOC-FeeAmendment-2021-001 is signed and on file. The deck was built from an old
template that still had the prior rate in the footer. Your billing has correctly
reflected the 0.85% tiered rate since Q3 2021. I'll issue a corrected version by end
of this week — I want the right document in your primary folder.
[0:10] Sam Chen: Okay. As long as the billing itself has been correct, we're not
worried about a document error.
[0:11] Sarah Chen: Billing has been correct since July 2021 — I can pull the
quarterly fee statements if you'd like to verify. The footer was purely a stale
template. Corrected version to you by March 23rd.
[0:13] Alex Chen: No need to pull the statements — we trust you. Let's move on.
[0:14] Sarah Chen: Thank you. On the NLTK Q1 vest: executed March 1st, 625 shares at
$17.50. That's $10,938 of W-2 income. Notice the price drop from Q4 — NLTK has fallen
with the broader tech selloff. We sold 450 shares for diversification, held 175. NLTK
concentration is at approximately 3.2% of total AUM — well within our 5% cap. The
lower vest price actually brought concentration down nicely.
[0:17] Alex Chen: I noticed NLTK's price has really fallen. Is there something
wrong with the company or is this market-wide?

[0:18] Sarah Chen: Primarily market-wide. Tech and growth stocks have been hit
hardest by the rate-hike cycle because their valuations are more sensitive to rising
discount rates. Higher rates make future earnings worth less in today's dollars.
NLTK's fundamentals look solid from what I can see. But I want to be careful — we
diversify precisely because company-specific risk is real and unpredictable. The
lower vest price this quarter is actually a smaller tax bill, which is its own silver
lining.
[0:21] Sam Chen: What's the main theme for 2022 planning given the rate
environment?
[0:22] Sarah Chen: Patience and discipline. I'm not making allocation changes in
response to rate hikes. The 60/35/5 is built for this environment — it's not built to
avoid volatility, it's built to survive it and capture long-term growth. What I am
going to do is monitor your fixed income duration. If the Fed hikes more than three
times this year, I'd want to shorten the duration of STBIX to reduce bond price
sensitivity. No action today — just monitoring.
[0:25] Alex Chen: On the home — first full year as homeowners. Property taxes
came in higher than we expected.
[0:26] Sarah Chen: Property taxes are deductible as part of SALT — state and local
taxes — but there's a $10,000 cap on SALT deductions under the TCJA. You're almost
certainly at that cap given your income tax state liability plus property taxes. The
mortgage interest, however, is fully deductible if you're itemizing, which I expect
you are in your first full year. I'll coordinate with your CPA on the TY2022
projection before September.
[0:28] Sam Chen: The house has been great despite the unexpected expenses.
[0:29] Sarah Chen: Year one always has surprises. Action items: corrected strategy
deck by March 23rd; model Q2 estimated taxes incorporating the Q1 NLTK vest income;
monitor fixed income duration if Fed hikes accelerate beyond three this year.
[0:30] Meeting adjourned
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ACTION ITEMS
1. Issue corrected strategy deck with accurate 0.85% tiered fee schedule — by
March 23
2. Model Q2 estimated tax payment from Q1 NLTK vest income — send by April 30
3. Monitor fixed income duration; shorten STBIX if Fed hikes exceed three in 2022
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CONFIDENTIAL — For client use only. Not for distribution.
