Enclosed you will find your Third Quarter 2009 Quarterly Performance Report. Not to sound repetitive from last quarter, but again our patience is being rewarded terrifically along with the rebalancing and adjustments we have made along the way.
For the 90 day period ending September 30, 2009 the S&P 500, our favorite domestic equity index, gained just over 15%. This is not only an extremely positive return, but comes on the heels of a similar return for the prior quarter. Again not to repeat our comments from last quarter, but we do not expect these kinds of returns on a continued basis.
We suspect a large amount of investment dollars are pouring into the markets as clarity is gained not only here in the US, but globally as well, marching the collective capital markets higher. (See our September 17th Blog “I Missed It! I Missed It” !)
Inflation is no where to be seen as of yet. Yes, we are still watching with a careful eye, and continue to monitor our indicators for future inflationary forces.
Interest rates, another areas of focus, and the main topic of our current Newsletter (Fourth Quarter 2009), have been extremely cooperative as they have remained low much longer than we thought, and actually dropped late in the Quarter, providing more steam for the capital markets, and continued help for the housing market.
While the last Quarter of the year has historically been the best returning quarter, we feel the bar has been set high and jumped over in the prior two quarters. A slower, more deleveraged economy, on solid footing, is our rather. This may mean a very meager return compared to the last two quarters, but would, in our opinion, give the economy, and investor’s, time to heal.
Thanks so much for your confidence and compliments.
Best Wishes,
John A. Kvale CFA, CFP
Enclosure (2009 Quarter 3 Performance Report)