A Perspective for the New Year

I was listening to a news commentary on PBS last night and the discussion revolved around the state of the economy, 8 to 9% unemployment and the housing and financial mess that we continue to face. All agreed that these are indeed tough times. However, one of the guests reminded the others that tough times are not new and that over time we have always worked our way through seemingly impossible situations. She took the conversation back to the year of 1980 when a guy by the name of Paul Volcker was in charge of the Fed. In an attempt to control rampant inflation, Mr. Volcker hiked the prime interest rate to a staggering 21%. I remember feeling fortunate to have secured a 10 ¾% mortgage rate at the time. Unemployment that year was at 12%, and the Dow was at 800. Who would have dreamed then that we would be talking about a 10,000 Dow today, much less a 12,000 Dow? And for those of us old enough to remember, who can forget those horrible gas lines that were a result of turmoil in the Mideast? She was right. We have indeed faced tough times before, and we will work through them again.

Her view gave me pause, and I thought that perhaps there was reason for us to all be a little more optimistic as we celebrate the New Year.

--Ken Hatfield

A Word about Referrals

When you refer someone to us, we regard it as a sign of trust and a compliment of the highest order. Referrals, after all, are the lifeblood of our business and are the largest source of new business for our firm. As such, you should know that we will do everything we can to meet and exceed the expectations of people you refer to us.

We have found that often referrals are a result of a “life change” which someone either anticipates or is currently experiencing. These “life changes” can be complex, and professional guidance is often helpful. They can include retirement planning, job transitions, inheritance, college and education planning, or the sale of a business or residence, just to mention a few.

It is at these times, when friends or an associate is experiencing a “life change,” that a referral to Portfolio Advisors may be of valuable service to them. We will do everything we can to make sure that your referral will be happy that you did.

Thank You For Attending

Thanks to all for attending our “Investment Strategies in Turbulent Times” presentation held on Nov. 14 at California State University Fresno, University Business Center.  There were over 90 in attendance.

Highlights of the evening included the honoring of Portfolio Advisors Inc. founder, Gary Leffler.  Gary was presented with a custom made framed piece that included memorabilia from throughout his career.  The presentation was made by Michael Leffler (Gary’s son) who is the principal and owner of Portfolio Advisors.  The featured speaker from Dimensional Funds was Regional Director Jay Totten who talked about the importance of a diversified portfolio in weathering the economic storms that inevitably occur.    

See pictures from the event below

Market Turbulence

October was quite a month from an S&P 500 standpoint.  The index grew 10.9%, its largest growth month since 1991.  This growth spurt followed, as you may recall, 5 consecutive months of decline.

We’re certainly seeing big daily, weekly and monthly swings in stock market indices…. turbulent times indeed.  But, with stock markets, shouldn’t we expect a degree of turbulence?  Since 1980, for example, the average intra-year (that is, during each calendar year) S&P 500 decline exceeded 14%.  Restated, the average high-to-low decline during those calendar years exceeded 14%.

Calendar year returns since 1980 were positive 24 of the 31 years, despite those intra-year declines.  And, the average annual return for the S&P 500 for the 1980 through 2010 period was 11.4%.  So, a level of stock market turbulence seems to have always been with us, and the long-term stock market return was attractive despite it.

It is our belief that a properly diversified investment portfolio remains an effective strategy for dealing with rocky and uncertain markets in the future.  Your advisor is best suited to help you navigate through these turbulent times. 

Changes Made to Website and Blog!

Thanks for taking a look at our updated website and blog!  We have been hard at work to make the website compelling and relevant.  We have also changed the look and functionality of our blog and we invite you to follow us by submitting your email address.  When a new item posts, you will receive an email alerting you with a link to the item.  We plan to add one or two new topical items per month and hope that you will find them interesting.  Some other new blog functions include the ability to easily email an item to a friend, or to post it to your own blog.  You will also be able to share the post through your own Twitter and Facebook pages.    

We also hope that you spend a few minutes going through our website and checking out all of the content.  New to the site, is information related to the client experience, FAQ’s or general questions and answers as well as information about our strategy and philosophy.  In the “Client Center,” you are able to access your portfolio documents and can access many tools, such as a 1040 tax calculator and an amortization calculator.   In the “Information Center,” you will find Financial Briefs, Featured News and Articles of Interest.  You will want to check this area monthly for articles that may be helpful to you.

We hope you look forward to our monthly updates and we look forward to serving you. 

Two New Team Members at Portfolio Advisors

We're very excited to have two new, talented individuals join our team.

Ken Hatfield (a longtime client of the firm) joins us after a career with the Fresno Bee. Ken will act as Financial Advisor and Director of Client Relations.

Amber Curran recently graduated from Fresno State. She will serve clients in an administrative capacity and has a very bright future ahead of her.

We're very happy to have Ken and Amber with us. They will allow us to better serve our existing clients and give us capacity to serve additional clients.

Hero of Wall Street

A dying man's wish to bring the knowledge of Wall Street to Main Street.

http://abcnews.go.com/Nightline/video/gordon-murray-hero-wall-street-12691101

The Economics of Fiscal Deficits

The large budget deficits run by the U.S. government are a big concern to many. What does history tell us of the implications? To economic growth? To stock markets? This study by Marlena Lee sheds light on the topic.

http://www.dfaus.com/2010/11/the-economics-of-fiscal-deficits.html