Golden Bells April, 2009
Our client event last week at The Club was, in our view, good on many levels:
Every client was invited, and those who attended learned a great deal. Friends and family as well enjoyed the evening. Not all the news was good, but it is always better to know than to ignore.
It was fortunate to have scheduled Evan Harbot of Inland Realty to speak, since there is so much going on with them. Changes in dividend rates, repurchase programs and acquisitions were all explained. We asked questions and got good answers.
We discussed the three things we have done to cope with the current difficulties.
Non-correlating assets, like Inland REITS, have given us income, stability and growth potential for years that have nothing to do with the stock and bond markets.
We made clear that, even though it can be tempting to just move to cash, buy CDs, and forget the stock market, we must stay in the game. Over the last 30 years, after inflation and taxes, CDs have returned negative returns in 13 of those years. Further, in 4 of the positive 17 years, the real rate was less than 1% per year. Said another way, CDs have lost about half of their returns for the past 30 years to inflation alone. Since we anticipate the possibility, if not probability of higher inflation to come, we have to grow our assets.
The "Buy and Hold" way of doing things is no longer working. "Stay the course - hunker down - don't worry - ride it out"; all those stock broker sayings are not providing any comfort or results. If we have continued difficult times in the markets, we will need smarter, more agile management. We need to hire managers who have the ability to get out of the way when they see bad things coming. The professional lingo for this is "Tactical Management." We are calling it "Buy, Hold and Duck."
Our focus now is on absolute returns, rather than relative returns. We want to try to make money consistently, rather than just beating the market. In 2008 you could have lost 35%, over a third of your life savings, and still "beaten the market." We believe measuring performance against the market can be used as an excuse for not doing better.
It is always enjoyable seeing each other in a setting other than our conference room.
We all thank Libby and Andrea for planning and putting together the whole evening. Allison Lewis, of Allison Lewis Photography, made pictures.
Please feel free to give us suggestions for other events. We want to make sure you always know, understand and appreciate all aspects of our business.
VIEW OUR GOLDEN BELLS ARCHIVES
What is Different This Time September 2011
Who is Atlas May 2011
Performance Anxiety February 2011
Ball of Confusion October 2010
Into the Storm June 2010
Year 2009
April 2009
March 2009
Year End 2008
Halloween 2008
PryorMcCormick Investments
4000 Southlake Park, Suite 200
Birmingham, AL 35244
Securities and investment advisory services offered through Sterne Agee Financial Services.
Member FINRA/SIPC.
PryorMccormick is not an affiliate of Sterne Agee Financial Services.