2nd Quarter 2009 Client Letter
The Markets Generally
For virtually all asset classes, very strong months in April and May were followed by a flat to negative June, resulting in a quarter with solid positive returns. The S&P 500 Stock Index increased 16%* for the quarter. Commodities, real estate, and international markets performed even better. The BarCap U.S. Aggregate Bond Index was up almost 2%.
Simple blended benchmark returns (based on only the bond and stock indexes) for the quarter ranged from 6% for conservative portfolios, to 9% for moderate, to 13% for aggressive.
Year-to-date, the S&P 500 Stock Index is now in positive territory, up just over 3%, while the BarCap U.S. Aggregate Bond Index increased close to 2%.
Your Portfolio
Your portfolio, as you might expect given that backdrop, had a strong quarter. In fact, unless you are one of a very small minority (i.e., those who modified their asset allocations to the more conservative side during the year, and thus failed to ride the markets fully back up), your performance exceeded that of your relevant quarterly benchmark.
Year-to-date (again, unless you are in that small minority cited above), your portfolio has now overcome its first quarter decline, and is up for the year.
Observations
While the markets continue their volatile ride into the future, remember this: the markets go up, the markets go down, but in the long run, they go up. This is even more true of a properly positioned, well diversified, and regularly rebalanced portfolio that participates appropriately in each of these markets. In light of this and recent events, please revisit our June 5, 2009 Special Bulletin (archived on our Web site under News Room>News Flashes) and make certain that your current investment strategy and concomitant asset allocation truly reflect your long-term risk tolerance.
Following up on another item in our last bulletin, shortly before the quarter ended we returned to our full normal portfolio rebalancing activities, which should allow you to exploit short-term volatility to your advantage.
Once again, given the markets’ considerable decline late last year, which would cause those clients who are subject to our minimum fee to pay a disproportionate share of fees, we are continuing for another quarter the temporary 25% reduction in our minimum fee.
Please remember to contact Brinton Eaton Wealth Advisors if there are any changes in your financial situation or investment objectives, or if you wish to add to or modify our investment management services. A copy of our current written disclosure statement as set forth of Part II of Form ADV continues to remain available for your review upon request. You should not assume that any discussion or information contained in this letter serves as the receipt of, or as a substitute for, personalized investment advice from Brinton Eaton Wealth Advisors.