Dear Investor,
Enclosed you will find your Q 3 2010 Quarterly Performance Report. For the Quarter our favorite equity index, the S&P 500, was up slightly more than 10%, which may seem like a nice move, but the ride was adventurous and ended with an extremely positive September, a month that is seasonally bad. While this may seem like good news, in our minds, we are closer to where we should have been, and the dramatic moves back and forth have been an exaggeration this year.
Due to the market movements you may have noticed more portfolio adjustments than in past years. These adjustments are a result of ongoing rebalancing and will most likely continue in the future, if market movements such as what we have had over the last few quarters, continue.
Looking ahead into the Fourth Quarter, we have a time when Economics meets Politics, which usually results in undecided movements in capital markets until a definitive resolution is inferred. Looking into 2011 an internal research project just completed for the Q 4 Newsletter, political mid-term history makes for a positive tone, no matter the election results on November 2cnd. We hope you will take a look at the lead article for greater detail of the actual historical results of post year mid-term elections, and capital market movements, they are very interesting.
China our co-dependent trading partner continues to gain in our country’s wellbeing importance. Happily we had, and continue to have significant allocations to international investments. Looking further into the future we expect greater dependence and allocations to overseas trading partners. Bear in mind as this occurs factors outside of the US will have greater impact on our country’s economic growth.
Interest rates remain in check, but continue to gain large amounts of investor capital. We continue to remain very conservative in our needed allocations to interest sensitive investments, such as bonds.
Have a Great Fall Season, and we hope to see you at the Annual Holiday Party, Saturday, December 4th!
Sincerely,
John A. Kvale CFA, CFP
Enclosure (2010 Quarter 3 Performance Report)