Our Company |
|
| Our Products | |
| Athenaeum | |
| At the Moment
• Market Performance • Questions for Your Investment Advisor |
|
|
|||||
 |
|||||
|
TO SUMMARIZE OUR THOUGHTS 12/31/2009 The ebb and flow of short-term data has produced a powerful market advance even though dangerous long-term cross currents exist.The enthusiasm with which investors chased prevailing trends without regard for longer-term risks is what brought about the series of bubbles during the last decade – the tech bubble, real estate bubble, commodities bubble – abetted by government ineptitude and a social welfare agenda. There is considerable uncertainty about how the economy and markets will play out over the coming year and beyond as the government’s role in the recovery is reduced. The specter of inflation, rising commodity prices, rising interest rates, and rising taxes will all be headwinds that will dampen the speed and strength of the current recovery. The government response to the current financial crisis has been to spend trillions of dollars, formulate new programs, increase social services, and become a private sector shareholder. Over an extended period of time, no economy can do well if the government is overspending, over regulating and creating money out of thin air. In the short-run, however, flawed long-term policies can produce a positive short-term effect. Over the last 70 years, dividends have contributed over 50% of the total return for equities. In addition, companies with lower valuations have historically outperformed over complete market cycles. Our tools to combat knee-jerk reactions to prevailing trends are time-tested principles of asset allocation, diversification, rebalancing, and patience. In this climate, our focus will continue to be lower P/E, higher dividend paying companies that use only appropriate levels of debt financing. |
|||||
