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THE YEAR AHEAD
May this letter find you and your loved ones happy, healthy and secure in this new year of a new decade.
"If it walks like a duck, quacks like a duck, looks like a duck, it must be a duck."
This phrase may not actually be true when it comes to the Markets this year and is certainly not true when it comes to many Hollywood stars and starlets. (I assume that plastic surgery was not as common back at the time of this quote!)
Here are the issues; we are in uncharted territory relative to the global fiscal stimulus that has occurred since the collapse of Lehman Brothers on September 15, 2008. Specifically, the USA has committed $787 BILLION DOLLARS or 5.5% of GDP and is 1 of 43 countries that has announced stimulus packages which total $2.18 TRILLION DOLLARS! The amount of funds, programs, government backing, extended insurance, etc. that has been created to thwart what many had considered the advent to a new Great Depression is unprecedented. With a recent Dow Jones Industrial 30 low in March, 2009 the market has increased dramatically to current levels. The DOW still stands at a 26% decline since its high of 14,200 in October 2007.
So, fundamentally, where are we now? That's the hard part. In an era of unprecedented artificiality through government intervention, programs and stimulus, it is nearly impossible to determine the stability of our economic footing. The Market has certainly rallied since the March 2009 lows but predominantly as a consequence due to shrinking costs, inventories, benefits, employment, consumer spending and other critical data which may hold the key to extended rallies and economic recovery. It is still a highly reluctant investment and credit market with banks more focused on shoring up balance sheets rather than extending credit. Broad-based investment and market activity are also diminished as both consumers and institutions are wary of the investment and economic climate.
I feel that there is opportunity but it demands a highly selective approach to matching investor needs to investment choices. I believe that in this environment, passive investing, i.e. index style investing, is not necessarily the most prudent way of approaching an investment plan. I believe that selection of specific stock and bond issues, specific countries of origin, specific sectors and industries is going to be necessary in attempting to navigate the very cloudy path of the Markets. As always a disciplined plan is a key element in my investment Mantra of: Diversification, Patience and Discipline.
We are committed to assisting you in the pursuit of your financial, estate and charitable objectives. To this end, we do ask a few things: 1) keep us informed as to change in address, contact numbers and email addresses; 2) respond to us in a timely manner as we do call for changes in portfolios, setting up reviews, events, etc.; 3) in order for us to do a complete job it is necessary that we know about all of your financial data relative to assets and cash flow; 4) help us to help you in increasing resources, staff, technology, etc. by referring friends, relatives and associates to us in order to assist us in building our customer base and therefore revenues to generate the aforementioned improvements. Once again, this year, we are foregoing our annual gift baskets and making charitable contributions in honor or our clients. The charities have suffered as many of us have due to economic difficulty and I think it best that we assist those that need our contributions.
Thank you, once again, for your commitment to the firm and myself, your confidence and your trust in our abilities. We wish you and your loved ones a happy, healthy, and prosperous 2010 and beyond.
Sincerely,
Irvin W. Rosenzweig* CFP®, ChFC®, CLU®, CRPS®, AEP®
President
Irvin W. Rosenzweig is a Registered Representative of WFG Investments, Inc.