From My Point of View | Thoughtful Investor Newsletter
FROM MY POINT OF VIEW
March 8, 2010 - HERITAGE BAY AT NEAR NORMAL LEVEL
HERITAGE BAY at NEAR NORMAL LEVEL...MARCH 8, 2010
What do you have to talk about when things are “normal” or “near normal”? When I go to the doctor and test results are within acceptable parameters he spends very little time with me. He may say, “Whatever you are doing, continue doing it”. End of visit. It is when test results are beyond acceptable standards or very different from previous results that there is conversation. It is in that situation when he says, “Change your dosage” or “ Let’s try a different prescription”.
The markets, behaved very well during the month of February. “Nothing much to talk about” has continued into March. So, this should be a short message.
Two areas I want to emphasize in this note: (1). What is meant by active asset management. And, (2) How I keep track of the progress and condition of investments made in Timeless Strategies accounts.
FIRST. LET ME TELL YOU THE STORY OF TWO TRAVELERS.
Traveler number one is set to leave home. He has consulted authorities with experience in route planning. The best route for him to follow has been determined along with the instruction that, because he is a cautious driver, he is to stay in the right hand side of the multi lane highway. He is told to expect periodic times when traffic will slow down to a crawl but not to worry. It will regain normal speed somewhere down the road. Based upon averages, calculated using long periods of past history, he will reach his destination in the time allotted for the trip. “Call me when you need help”, his travel planner tells him. He begins the journey, confident in reaching his goal. Along the way he experiences the first traffic jam and slows to a crawl. No worry, he has been told to expect a slow down. Other obstacles provide for more delays. This trip is not fitting the “normal” or “average” pattern. Then it happens. A sign ahead reads, “Bridge closed due to unexpected weather conditions”. Now it is clear, he will not reach his destination in the time remaining. And, it is too late to do anything about it.
Traveler number two is set to leave home. He is sitting in the back seat of the automobile. His driver begins following the route they have discussed. They start in the right hand lane of the multi lane highway. The driver, using his experience and professional skill, watches the traffic flow ahead, sees the congestion in the right lane and makes a change to a more open center lane. Their progress continues with periodic lane changes as traffic conditions make it advisable. The professional driver does not avoid all of the obstacles but is able to evaluate conditions and keep their progress reasonably consistent. The beginning of construction signs, increasing congestion, and an awareness of recent weather reports leads the driver to exit the highway prior to the “bridge closed” sign. Once out of danger of being caught and locked in with the traffic stopped at the bridge, an assessment is made of how to navigate back to the road on the other side of the bridge.
Traveler number one, as an investor, is following the traditional “buy and hold” or “passive asset allocation” systems most prominently offered by mutual fund sales people, index funds, and the brokerage business.
Traveler number two, as an investor, is using the service of a registered investment advisor who practices “active asset management”.
When you use our service, or that of one of our strategic partners we recommend, you are in a position to sit back, enjoy other areas of your life, and, let us do the driving.
SECOND. LET ME SHOW YOU HOW I KEEP TRACK OF YOUR INVESTMENTS.
FSA TS Investment Performance |
|||||||||
Symbol |
Name |
$ Basis |
$ High |
High Basis |
$ Current |
% Fr. High |
% Fr. Basis |
1 yr Yield % |
Date Buy |
PYEMX |
Payden Emerging Mkts. Debt |
$11.01 |
$13.68 |
24% |
$13.68 |
0% |
24% |
6.67% |
04.16.09 |
WAEMX |
Wasatch Emerging Mkts Small |
$1.59 |
$1.90 |
19% |
$1.88 |
-1% |
18% |
1.17% |
10.06.09 |
FRIFX |
Fidelity Real Estate Income |
$8.22 |
$9.52 |
16% |
$9.52 |
0% |
16% |
7.22% |
08.10.09 |
ASIAX |
Aim Asia Pacific Growth |
$21.74 |
$24.63 |
13% |
$24.47 |
-1% |
13% |
2.35% |
10.28.09 |
FNMIX |
Fidelity New Mkts Income |
$14.76 |
$15.24 |
3% |
$15.24 |
0% |
3% |
9.96% |
10.02.09 |
ICMBX |
Intrepid Capital |
$10.09 |
$10.78 |
7% |
$10.78 |
0% |
7% |
3.02% |
11.19.09 |
SSDAX |
DWS Small Cap Growth |
$16.92 |
$17.06 |
1% |
$17.06 |
0% |
1% |
0.00% |
01.06.10 |
HWAAX |
Hotchkis Value Opportunity |
$15.42 |
$16.30 |
6% |
$16.30 |
0% |
6% |
3.84% |
02.19.10 |
JHIAX |
John Hancock Small Cap. Val. |
$10.48 |
$10.98 |
5% |
$10.98 |
0% |
5% |
1.47% |
02.19.10 |
FAGIX |
Fidelity Capital & Income |
$8.63 |
$8.74 |
1% |
$8.74 |
0% |
1% |
11.66% |
02.22.10 |
FSRPX |
Fidelity Select Retail |
$44.18 |
$46.71 |
2% |
$46.71 |
0% |
6% |
0.45% |
02.22,10 |
How to interpret the columns. Trading Symbol and Mutual Fund Name are self explanatory.
$ Basis is the cost per share paid to buy the fund. $ High is the highest price for the share since purchase. High Basis is the percentage gain or loss of the current price compared to the Basis. $Current is the price as of the most recent update of the form. % Fr. High is the percentage decline in the fund since the high date. % Fr Basis is the percent gain or loss since purchase. 1 yr Yield records dividends, interest and capital gains distributed in the past year. Buy Date is when the fund was purchased.
Several other columns, not shown in this example, are: High Date; Current Date; Date Sold, and %Gain or Loss.
Fund, and account, values change daily. Investments do not always gain in value. There may be minor variations in client accounts due to special situations applicable to specific clients.
FINALLY. DO YOU RECOGNIZE THIS GUY? If you haven’t seen me in the past six months, this is what losing 30 pounds of fat looks like.
Yours, in favor of keeping things “normal”,
MORRIS.