Quarterly Letters Letter Archive
September 2011
What a Mess!
Economic trouble in Europe and a slowing economy in the U.S. combined to give us the worst quarter for the capital markets since 2008. September marked the fifth consecutive negative month for stocks as investors tried to make sense of the outlook for economic growth. We have said for the past two years that this has been a sluggish expansion, which is why a slowdown is troubling. From this point it would not take much for our economy to fall back into another recession.
June 2011
Pessimism & Optimism
During the last week of June, the stock market posted its best weekly performance in almost two years. Prior to that, it had dropped in seven of the previous eight weeks. Such is the world of stock investing. Economic data that suggested the economy was slowing down was the cause of the sell off. Better than expected data late in the quarter calmed many of these fears. Manufacturing data that topped expectations, stable home prices, lower unemployment claims, and higher consumer confidence all combined to push stock prices higher. We also saw some resolution to the debt crises in Greece, which calmed some of the fears on the global economic front, at least for now. The whole European debt problem will likely continue to be a problem for the foreseeable future.
March 2011
2011 Off and Running
Despite a few trouble spots around the world (Libya, Japan), U.S. capital markets continued their rise during the first quarter of the year as corporate earnings continue to impress. Stocks turned in volatile gains as good earnings trumped international events. Bonds were even for the quarter as interest rates continued creeping upward. Our economic recovery continues to gain strength, which should bode well for stocks going forward.
December 2010
2010 Year End Review
2010 was a good year for investors as both stocks and bonds turned in nice gains for the year. The stock market ended with a strong December, following up on strong gains during the third quarter. Bonds outperformed our expectations, even with a sell off late in the year. Stocks have benefited from improving economic conditions since the melt down two years ago and have regained most of what was lost during that time.