Since our last Update Letter, circumstances around the world have been more volatile than the stock markets!  We have had major unrest in the Mediterranean area and the terrible catastrophe in Japan unfortunately with a substantial loss of life.  Now we are rapidly approaching the tenth anniversary of 9-11 and find our selves embroiled in a third war in the Mideast.  (“Political correctness” probably stipulates that we should refer to it as a military conflict, not a war; but if it walks like a duck…)  The politicians are telling us it will only last a few weeks.  Keep your fingers crossed for a quick resolution and hope for a positive outcome for the people of the region.

Until mid February, the stock market had been on a strong uptrend from the previous bottom in August and was up over 6% for 2011 and then corrected back down to a negative return for the year and is now back up to about 3% year to date as of this writing (Friday, 25 March).  Our client portfolios are keeping up very nicely for the current period and our longer-term performance results are still better than the broad US stock market.  In fact, for the twelve years ended December 31, 2010, our collective composite results are approximately 20% better than the S&P 500 index.  We accomplished that performance with about one third (1/3) of the risk of loss as measured by the funds’ “Beta” and less than half the markets’ volatility as measured by the “Standard Deviation.”  As you already know, I am required to tell you that past performance is not a guarantee of future results.  All investments have risk and can gain or loose value over time.

Economic data continues to be variable with some things improving and others not.  Unemployment in the United States is still at approximately 9% (if you believe the government measurements) but it is a little lower than it was a few months ago.  The trend does seem to be slowly getting better.  Unfortunately, that does not seem to be the case for real estate as the foreclosure problem continues to hamper residential property values.  Depending on to whom you listen, the opinions are all over the map; but the simple facts show that the trend is still down generally and may continue until 2012.

Over the past few months, we have provided an updated retirement analysis for a number of clients in an effort to help them become more comfortable with their current financial circumstances as it relates to maintaining their lifestyles.  In several cases, we were able to assist in finding ways to reduce some expenditures to allow their resources to potentially last for a much longer period of time.  Please keep this in mind and also let your friends and relatives know that we would be willing to provide this retirement analysis service for them as well.

As always, please don’t hesitate to call me if you would like to chat about anything!