As I am working on this month’s Update, I am looking out my office window, which offers a nice view of the neighborhood behind my office building.  However, it would be much nicer if I were looking out the window of the Sarasota Yacht Club at the beautiful marina and water view.  Oh Well!!!!! Back to work.

The month of April ended with a Positive Bang in spite of the additional volatility caused by the Standard & Poor’s threat to downgrade the credit rating of United States Treasury Bonds.  Since hitting year-to-date highs at the end of April, the market has been struggling and, so far this month, stocks have experienced a loss of around 3% in the broad domestic market.  Most of the analysts we follow currently feel that even though short-term reversals like this can be uncomfortable, the intermediate-term trend is still positive until summer (or perhaps until fall).

One of those analysts, STIR Research, recently wrote the following in Tuesday’s evaluation:

Bigger picture remains positive.

• The Advance/Decline line hit new highs last week, while the S&P 500 did not. This is a positive divergence. Typically the A/D line is a leading indicator, and has been for this entire two year old bull market. It is simply signaling that the overall trend remains higher.
• Earnings’ continue to surprise on the upside. With some 456 S&P companies reporting (as of last Friday), 76% beat or met analysts’ earnings estimates. These companies were averaging first-quarter earning growth of +19%.  This was a full seven percentage points higher than predicted at the start of the quarter!

Your managed portfolio continues to provide outstanding results since the beginning of the year as well as for the long term.  This is another great example of the value of our Active Asset Portfolio Management, which provides substantial reduction of risk of loss while providing strong potential for excellent profits.

Several years ago we began to track our performance going back to the beginning of 1999 and now have accurate Composite Performance data for almost 12 ½ years (We could have gone all the way back to 1988).  We have consistently out-performed the broad stock market for that entire time by a substantial margin. Even better is the fact that we have accomplished these results with a great reduction in risk of loss.  Our standard deviation is about one half and our beta is approximately one third compared to the measurements of the S&P 500 index.  As you already know, I am required to remind you that past performance is NOT a guarantee of future results.  All investments have risk and may gain or lose value over time.

In January, I passed the 40-year mark of serving clients in this Financial Services Industry.  I am excited about our firm, Couture Financial, continuing to provide excellent service to you and your family, our valued clients, for many decades to come!  We are always here to respond to your needs.  If you would like to discuss anything, do not hesitate to contact my son, Lance, or me.