Q 3 2015 Quarter Performance Report Cover Letter (Clients)

Dear Investor:

In “Lucy like” pulling of the football to Charlie Brown, Janet Yellen, head of the Federal Open Market Committee (FOMC) choose not to raise rates by an even tiny .25% at their most recent meeting in September. In defense of not raising, Yellen painted a gloomy picture of the domestic and global economies. Global markets, in a seasonally weak period, acted gloomy, dropping double digits as a whole for the quarter. We do think rates will eventually be raised, but possibly not until next year.

Frothy markets only need an excuse, not a reason. While we are not sure if the reaction was a cause and effect, or just the excuse, weak capital market results were the same. Additionally, domestic corporate earnings on average are flat to negative, driven heavily by the Energy sectors sharp losses. We discuss this in greater detail in our current Newsletter.

Speaking of excuses, fears of China’s economic slowing have gained traction in headlines recently, especially affecting commodity dependent emerging markets who have received the double punch of lower commodity prices and a slightly slower exporting partner in China. With so many levers to pull and such a huge population, it may be only a matter of time before these Asian fears subside and turn from negative to positive, putting the wind at the back of an underperforming asset class and especially emerging markets – one of our favorites.

The Good news for us as investors is cheaper prices make for better long-term gains in the future. There may be headwinds, but capital markets according legendary investor Warren Buffet “Generally go up, three out of four years.”   This compounded with historically a positive time of the year, may lead to a better end of the year.

Enclosed is your Q 3, 2015 performance report which outlines the last ninety days, a very small period of time in our long-term journal to financial success.

Have a Great start to Fall !

Sincerely,

John A. Kvale CFA, CFP

Enclosure (Q3 2015 Performance Report)