Quarterly Update

03Apr09

The first quarter of 2009 brought a little bit of everything. Consumer confidence has never been measured at lower levels than what we saw through January and February, and the markets reacted accordingly. We witnessed unprecedented economic conditions, more unnerving stories of greed and deception, and levels of government intervention like never before. The S&P and DOW continued to drop, falling just more than 25% by the second week in March. However, the second half of March also recovered approximately 20% giving us the best single month since 2003.

The S&P and DOW ended the quarter off roughly 11% and 13% respectively. The NASDAQ, on the other hand, turned positive for the year during the last few trading days of March, but still ended the quarter at roughly negative 3%. There are sectors moving quickly in positive directions, despite the continued slide of the greater picture, and sectors that look to be just now hitting the brunt of the storm. Simply put, it is so important to have a well thought out portfolio and allocations that fit your objectives.

From the beginning of 2009 our firm has been over-weighted in four sectors, including technology, financial services, natural resources and real estate. Three of these four were the leading performers for the quarter. We have recently seen signs that the economy is stabilizing, with increases in durable goods orders (for the first time in eight months), an uptick in home starts, housing permits and home sales. Consumer confidence has also moved in a slightly positive direction. We have not seen an increase in any of those data points through most of these tough times and the move in late March of nearly 20% looks to be a direct correlation of this news. Had you missed this most recent move it would have only compounded the losses suffered by the global financial markets through 2008.

Moving into the second quarter we continue to be over-weighted in technology, financial services and natural resources. We have also positioned our portfolios to take advantage of our weak dollar, increasing our exposure to large cap growth. With the US dollar so weak, this makes our multi-national companies (Google, Caterpillar, GE, Pepsi, etc.) extremely competitive overseas. We have also hedged our portfolios with lower beta sectors, i.e. health care and intermediate bonds.

We feel extremely comfortable with our model portfolios, to take full advantage of the current economic climate. If you would like to learn more about our firm, our investment outlook, or how we work with 401(k) or individual investors, please feel free to contact our office and we’ll be happy to schedule a time to meet.

Best regards,

Ron Sloy

Learn more about Ron Sloy.

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One Response to “Quarterly Update”


  1. 1 trends watch

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