Client Communications

For the second time this decade, a major cleanup of corporate mismanagement and greed is in the works. In 2002, it was the accounting scandals that destroyed household names like Arthur Anderson and Enron. Today the mismanagement of risk and the allure of short-term gains has taken the 158 year old Lehman Brothers firm, Merrill Lynch, and possibly AIG Insurance Company.

Recently, our research into stock and bond markets’ performance with respect to mutual fund cash flows produced some interesting results we thought to share with you. Simply put, mutual fund inflows are when people buy the funds and conversely, outflows are when people sell. The accompanying chart is a 10 year graph of the S&P 500 Index and Lehman Brothers Aggregate Bond Index through the end of July 2008.

Diversify your 401(k) plan. You have heard it before, but we will say it again. Don’t leave too much money in your company’s stock, or any stock for that matter. Studies continue to show that employees are letting their 401(k) plans remain overly concentrated in their company’s stock.

The American Association of Retired Persons (AARP) has recently reported that lenders offering reverse mortgages are abusing consumers. Homeowners using reverse mortgages borrow against the equity of the house and receive payments from a bank. The loan is repaid with interest when the house is sold or when the borrower dies. The report found that […]

The bottom line again is greed taken to the extreme. Suffering this time will not be limited to the pros or the wealthy. Ordinary investors, who got sucked into the frenzy of the private equity plays, or even junk bond mutual funds, will feel the pain before this is over. We feel that quality investments […]

Near term there are concerns of the higher risk sub-prime market imploding if interest rates keep rising. The financial sector , which has enjoyed an exceptional fun over the past few years, looks to be near the end of its run. Financials now make up 20% of the S&P 500 Index and have held the […]

Continue to invest regularly while trying to avoid the negative media and we will continue to identify exceptional managers and guide you towards your goals.

As usual, it took the refocusing on the better than expected earnings reports from corporate America to turn the markets in the positive direction. The fact that the inflation numbers leveled off, which prompted the Federal Reserve Board to not raise interest rates in August, also helped. Whenever market fundamentals are healthy, attention must eventually […]

2005 was similar to previous flat market years when active management outperformed the static indexes. Small and midsized companies along with their international counterparts led the surge in prices versus the large companies.

Much of the success of these portfolio allocations will depend on the ability of the retirees to avoid the mass moves, by emotional and uniformed investors, out of the markets during a decline and jumping in at high points of euphoria. The selection of experienced portfolio managers along with disciplined asset allocation is vital to […]