A letter from our President: a great first quarter


Hello to all of you!  I hope you are well and seeing the promise of spring.

Usually I leave it to the Investment Department to cover the current market conditions in their commentary.  However, this has been an extraordinary quarter.

As you may know, the first quarter of 2013 has been a great one in the market.  The Dow Jones Industrial Average had its best quarter since 1998, and the S&P 500 finished at a new all-time high. Inflation remains in check and the U.S. economy continues to grow.

Globally, challenges continue in the Eurozone, and European Central Bank decisions are being watched closely.  Japan’s central bank is expanding its stimulus plans to spur growth there, and there are indications that economic growth in China is accelerating.

So what is the economic data telling us?  Should we be investing?  Should we be cautious? 

I would answer  the last two questions with a YES.  There is economic growth to be found globally, and we invest with a global perspective to take advantage of that growth. There is also risk, to be sure.  This is a time for measured, disciplined, prudent investing.  We are closely monitoring risk levels. Now is not the time to take on uncompensated risk.

Now is the time to be talking about what we will do when the market moves in the wrong direction.  We all need to be aware that volatility in the market remains, and that the market will at some point decline in value.  We should expect set-backs to occur, and agree today on how we will address the set-backs when they come. The Great Recession of 2008/2009 demonstrated a couple of very important lessons.  While the stock market fell over 50% during 2008-2009, a balanced portfolio of 60% stock and 40% bonds lost 29%.  That same balanced portfolio fully recovered within two years and is significantly ahead today.  This clearly demonstrates to us the importance of diversifying the portfolio’s holdings and staying the course, through the tough times.  Let’s make the good decision today, while it is sunny, to remain committed to the market even when it storms.  That decision will serve us well over the long haul.


Ann P. Wiesbrock, CFP®

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