2007 News Archive

December 11, 2007

380 Elm Street

Markets continued this year's jagged path in November, removing October's gains but leaving investors well ahead for the year. After October's high the DOW gave us the first correction in our nearly five-year-long bull market. Investors define a correction as a market close down 10% from its high. A bear market is official when the market closes down 20% from its high. The correction reduces stock prices that have inflated in a bull market and brings them closer to appropriate levels. A bear market reduces stock prices to a level where they can again anticipate growth. The major U.S. stock indices range from 4.4% to 10.2% YTD and 8.1 to 8.6 over three years. Our diversified portfolios average 8.2% YTD and 12.0% over three years. December is usually a positive month for stocks, with a rally toward the end.

How far we have journeyed through this year. The calendar marks earth's trip around the sun. Memory marks time between events. In earth's dark season we celebrate with candles and song, with hope and with kindness. Unexpected kindness has real power. What gift is greater than to welcome a stranger? That must be the beginning of peace on earth.

November 2, 2007

380 Elm Street

October markets offered a pause but ended strongly. Tech stocks have returned this year as star players for investors for the first time since the 2000 tech crash. Small company stock has returned less than large this year for the first time in several years. Our diversified portfolios trail the tech heavy indices over the past 12 months but lead all indices over the past three years.

As to the upcoming markets performance we may see a slowdown for the remainder of 2007. Our accounts average 11.8% year to date, a respectable annual return in the first ten months. The economy is expected to slump somewhat over the next few months but the aggressive action of the Fed in lowering interest rates should keep recession effects minimized. Inflation still threatens once the economy settles out. Interest rates are likely as low as they will go for a while, as the Fed announced Wednesday. It seems investors are absorbing the "bad news" but what is good for the economy should be good for stocks in the long run.

Another bountiful year has spread abundance before us. The good friends who share equally in burdens and in joy have grown dearer. Yesterday earned our gratitude. Tomorrow seeks our welcome. We are ready from our core of abundance.

October 3, 2007

380 Elm Street

It has been an amazing market ride this quarter. From July's record high for the DOW index through August's nine percent drop to September's rebound after the Feds reduced the target rate. The down market summer seems to be behind us. Year to date the indices range from 2.3 - 11.5% and 11.2 - 13.1% for three year average. Our diversified portfolios average 9% YTD and 15% over three years. Small company stock suffered more than large company stock this summer.

While we expect investments to return strongly in the final quarter again this year, the economy is not past the threat of recession. The major market bumps may be over for now but there is a lot to watch going forward. With real diversification we have the best position for what ever comes next. Markets will change and that is all that is predictable.

The season of abundance and gratitude, of great pumpkin grins and simple gifts, hearts warmed in shared laughter and burdens lightened by small kindness - we share the plenty in our lives. Wishing you the fun and excitement of this season, without the snags.

September 4, 2007

380 Elm Street

For all the daily market swings August returns landed on the plus side. Our diversified portfolios average up 0.47% for the month. Our numbers lead the S&P 500 index in YTD, one year and 3-year timeframes. We trail the DOW index over the short term YTD and one year returns but lead all major domestic indexes over 3-years. The market tumult may not be over. September is often a hard month for stocks and this may be true again as the current economic issues, including effects of the housing market slump, are not resolved.

Federal Reserve Chairman, Ben Bernanke has navigated the current crisis well, maintaining the economy with more available cash to banks for legitimate loans, but resisting the pressure to lower the Federal-funds rate. Lowering that target rate would have bailed out the market risk takers and encouraged them to repeat the behavior that has undermined the markets and threatened the economy. He may yet determine that a rate cut is necessary to maintain the economy, but for now it seems that the reduction would be small and temporary, and not the return to low interest rates and easy money that the markets want.

Labor Day is past but the best of summer often comes in September. Certainly we treasure the gems more that come our way late in the season. Memories of summer, stocked up like jars of ripe peaches and bags of frozen blueberries will renew the pleasure of these fleeting days. Unlike larder, images do not deplete with use but intensify. Savor the best, again and again.

August 2, 2007

380 Elm Street

At last the market correction we have prepared for seems to be happening. All the fears that investors have ignored are suddenly irrepressible. July prices lost their footing but the damage is not excessive, remaining well within the range of what we anticipated. Our diversified portfolios average 5% gains year-to-date and annual three-year returns average 13.9%. The indexes range 2.6 to 6.0 YTD and 9.2 to 10.5 over three years.

The deed is done. 380 Elm Street, Suite 3 is quickly comfortable and we wonder how we ever fit into the old space. There is always a glitch in a move and it was again provided by Verizon. On moving day they discovered they cannot use their lines from the street and so cannot provide phone service until their contractor can replace the lines. Meanwhile incoming calls go to a Verizon voice mail box where we can retrieve them. We will return your calls via cell phone. Thank you for your patience with this temporary inconvenience. All else is running smoothly and you can still reach me directly by email.

The Post Office has notified us that their automated equipment does not rout mail directly that is missing the suite # in the address. Including "Suite 3" in mail addressed to us should avoid this new postal delivery issue.

Summer gatherings offer an abundance of memory-making opportunities. What does life offer of greater value? With a harvest of shared experiences, reunions, explorations and celebrations to store away for future pleasure - the bountiful season provides riches indeed. We look forward to welcoming you to our new office.

July 2, 2007

93 Commonwealth Avenue

Despite overall gains in the second quarter, June markets slowed the bulls charge of the first two months. With housing market and energy issues still looming, the outlook for the third quarter is cautious. Year-to-date the major U.S. stock indexes range from 6.0 to 7.8% and average 8.6 to 9.8% over three years. Our diversified portfolios averaged 7.3% YTD and 13.6% over three years.

There was a flight to safety from stocks to treasuries as June closed, on news of reduced inflation. Bond values increase as inflation subsides. Economic conditions worldwide have investors concerned about the future of the current stock rally. A significant step back in stocks now would be a healthy move for the markets. The losses would be temporary and would set stocks up for another strong rally. Accommodating market cycles is crucial to long term investing comfort. Your questions and concerns are always welcome. Phone and email connections are unchanging.

Our office move now seems certain for the end of July. The builders have started the new walls and plan to be done before month's end. Laurie and I are working on the details of the move with fresh energy. July appointments continue at the current office. Beginning in August we look forward to showing you our new digs inside a unique local building. Directions will be mailed later this month and reviewed when Laurie calls you to confirm your appointment. If you know someone looking for an office in North Attleboro, this space at 93 Comm. Ave. will be available.

Summer now begins in earnest. We capture the golden days in memories of family gatherings and relaxing times with friends. It is a worthy harvest to gather in and store up against the cold.

June 1, 2007

93 Commonwealth Avenue

The date for our move to the new office remains undetermined. The contractor still assures me it can be done by the end of June, but we are no further along than we were a month ago. When I know a date, I will post it here. The new sign should be installed at 380 Elm Street in late June, before we move. Phone and email will remain the same.

Stable interest rates from the Federal Reserve and steady, not strong, growth reports from companies were enough to give stock markets the best May in four years. Year-to-date returns of our portfolios average 8.6% and 14.7% over three years. The major U.S. stock indexes range from 7.6 to 9.3% YTD and 9.4 to 11.0% over three years.

The final step of the merger with TD Ameritrade ended in May. They did an amazing job of orchestrating the changes but it entailed a lot of extra work here to deal with the account number changes, and a number of "glitches" that could not have been anticipated. If you use www.advisorclient.com to access your accounts online, please send me a message on the email address you used to register originally. I need to know that address to assign you a new user ID. Your password is not changed.

Change is the discomfort of progress. I am challenged to focus on the benefits our larger space in a professional setting will offer for many years to come. Meanwhile the garden offers solace and we all are making plans for summer events. The season beckons with promises and pleasures and we will savor the fleeting days of it.

April 3, 2007

93 Commonwealth Avenue

As the softening economy rivals the pressures of inflation, investors are nervous. Usually a slowing economy dampens inflation but rising oil prices and the tight labor market have kept inflation looming, and the Fed reluctant to lower interest rates. Markets bumped through March but closed with an average gain of 1.1% in our portfolios. Our averages are 2.7% YTD, 10.3% over the past year and 11.9% over the past three years. The major U.S. stock indexes range -.9 to .3 YTD, 3.5 to 11.2% over the past year and 6.0 to 8.0% over the past three years. Our goal is not to beat the indexes but to deliver respectable long term returns with minimal downside risk.

A year ago we were settling into new quarters. This office allowed us to bring our administrative assistant, Laurie Dyer, onboard but does not provide the space we need for an additional adviser. The suite we have reserved at the round house - the old gashouse to locals - offers the professional space we need. This new space also needs to be built into offices and we will keep you posted on the progress. We expect to move early this summer. The goal with any move is to improve our service to you. Finding an excellent planner/adviser to work with us is next.

April is a great awakening in the Northeast. After the long grey months of winter, we are charmed again with each return of the sounds and colors slowly exploding around us. The energy of nature's extravagance infuses these days with a power unique to Spring - a force of sweet return. With fresh birdsong and bursting green shoots we welcome the new season of hope and all things possible. Wishing you a strong dwelling in possibility.

March 2, 2007

93 Commonwealth Avenue

February 27th removed all last month's gain in our diversified portfolios, with the month averaging -0.3% but holds 1.6% year to date and stands at 11.4% over three years. The major U.S. indexes range -1.6 to 0.0% YTD and 5.1 to 7.1% over three years. Cash and quality bond positions were powerful in limiting Blue Tuesday's damages. All stock positions fell, some less than others.

After eight straight months of gains in the fourth year of a bull market, investors are nervous about high stock prices. China's 8.8% plunge Tuesday, following Greenspan's comments to a Hong Kong audience on Monday about U.S. economy showing signs of slowdown (recession), triggered the sell-off on Wall Street and European markets. After years of negative returns, Chinese stocks rose over 100% last year. The demand for China's stock is symptomatic of investors' recent trend to take on more and more risk in all markets. The return however for this greater risk has been diminishing. The massive flight to U.S. Treasuries, a refuge from risk, on Tuesday said it all.

Another point to mention is China's 2 trillion in cash that is not yet invested. The Chinese government is the largest single holder of U.S. Treasuries. China's size and independence from the west will increasingly impact world markets and economies.

The best guesses for the immediate future suggest that stocks will hold up for the time being and may even set new records before a real correction happens. You are well positioned for both.

February 2, 2007

93 Commonwealth Avenue

The darkest days are behind us for another year. The snow may yet pile deep and the wind blow full of knives but the sun is stretching legs in February and will not be denied.

The mixed bag of signals about the economy keeps everyone guessing how the Federal Reserve will read the bottom line. This week Ben Bernanke reaffirmed that the Feds feel inflation is under control and they may even need to lower interest rates by this summer to stimulate the economy. The news gave stocks a boost. Our portfolios averaged up 1.8% for January, 11.6% from one year ago and 12.0% annually over the past three years. The major U.S. stock indexes ranged 1.3 to 2% in January, 6.6 to 15.2% from one year ago and 6.0 to 8.3% annual average for the past three years.

Something to consider regarding inflation is a look back at the 1970's, the last time we had runaway inflation. It was food prices, not oil, that started inflation in 1972. Some of us remember the 20% increase in groceries of the early 70's. Washington's current bias for home-grown fuels has doubled corn futures since September. Because corn prices have been low for decades, innovative uses of corn, like corn syrup, have penetrated food markets. Corn is the inexpensive feed of choice for cattle, hogs and chickens, read: burgers, bacon and eggs. As farms switch to higher-profit corn, the supply of other crops is shorted, driving up their prices. Corn is in a unique position to raise the cost of food, and inflation, with its continued price increase. We'll be watching this.

January 4, 2007

93 Commonwealth Avenue

With the Federal Reserve apparently successful in engineering a "soft landing" for the economy - between inflation and recession - the markets continue to thrive. The confidence of investors in the Feds may be greater than the Feds in themselves. Yesterday's release of the report on the December 12 FOMC meeting included doubts about the delicate balance that continue to haunt indicator interpreters and decision makers. It is tempting to bask in the current flourishing markets but the investment waters may be choppy for the next few months. The coming year should be another good one for investors but it is a long stretch before the final numbers come in. Meantime we should anticipate stormy weather for a while.

December drew the stock rally out to the end of the year. With stocks stampeding over the last half of 2006, the year returns were the best since 2003. One-year returns for the major indices range from 9.5 to 16.3%, annualized three-year returns from 6.1 to 8.5%. The average returns for our diversified portfolios are 14.1% for 2006 and 12.2% per year for the past three years. When stocks are hot our numbers are moderated by bond and cash positions. When stocks stumble our diversity reduces that effect and keeps us ahead for the long term.

The new year draws us with the lure of the unknown. For best advantage we need to explore it with new eyes - the old ones see everything the same way. A favorite writer, Annie Dillard, suggests we all need to learn to be astonished by our surroundings. Astonishment is a quality we lose as we emerge from childhood and along with it, being open to the unexpected in the ordinary. Although hard to regain once lost, life is full of richness for those who see with new eyes.

Copyright © 2003-2008 Victoria M. Lechner.  All rights reserved.