Ken Gilpin, CFP, President
For many investors, the reality of work, school functions for the kids or grandchildren, mowing the lawn, and painting the spare bedroom, is that there is not enough time to actively manage a portfolio of stocks and mutual funds.
I have attached over 25 quarterly client letters that I have sent out over the last nine years (see above tab for client quarterly letters). I stay invested with the trends, and have outlined some of our calls over the years outlined below:
In the fourth quarter of 2001, our client letter suggested high yield bonds with interest rates of 8%. We continued to recommend these investments over the next several years. They did very well, averaging over 12.31%, according to Morningstar from 2002 to 2004. For those who held these bond funds for ten years, they were well rewarded with an average return of approximately 6.96% compared to the S&P 500 of approximately 3.2% as per Morningstar Reports.
In the first quarter of 2003, our client letter started to focus on international
funds. In the fourth quarter of 2003, we actively discussed the devaluation
of the dollar, and we were steering investments to the international area.
By the first quarter of 2004, we openly questioned the potential for gain in
the U.S. and attached an article, "Why Legendary Investors Were Holding
Cash". By the second quarter of 2004, we were busy adding to our
international positions. In the fourth quarter of 2004, we continued to view
internationals as a good bet. All through 2005, 2006, and 2007 we stayed
with international funds. We held a number of top international funds, and
according to Morningstar, the foreign funds increased on average over
25% per year from 2003 to 2006.
By the third and fourth quarters of 2007, we talked about taking profits. In
fact, we mentioned the odds were growing of an economic recession, and
the markets would not be so hot in 2008. In the second quarter of 2008,
we discussed the volatility and bear market rallies. We were cognizant
of the situation, and had significant cash positions by September of 2008
when the market declined over 40% on the S&P 500.
Beginning in 2009, we began discussing the potential for a recovery rally
and were cautiously upbeat, and continued to think the market tug-of-war would be won by the bulls, which it was. We continued our positive
approach to the market, even through the summer of 2010, and were well
rewarded in September of 2010.
We follow the leading investment letters to continuously remain invested in
leading funds. We do not tend dinosaurs, and we do not chase concepts;
instead, we want to evolve with investments making money today.