Beyond the
Trading Desk |
Yes, the summer was again too short. I must say I enjoyed this summer very much and I hope you did too. I look forward to Fall, the cooler temperatures and, hopefully, some good hiking. I hope to do more Fall hiking than I did last year.
September 20th, 2008 was an important day for Sandra and me... it was the date of our fundraising event affectionately called the "Hare Ball." The proceeds go to the Critter Fund, which is part of the Community Foundation of Northwest Connecticut. The fund will provide grants to a variety of different organizations that provide for the care and well-being of animals. The Hare Ball was a smashing success with nearly all 200 seats filled. Scot Haney and Richard Schlesinger were special guests and they teamed up to provide much laughter as well as some touching animal-related stories. The Bunnell farm was beautifully decorated and the weather was perfect. My deepest thanks go out to Scot, Richard, the Bunnell's, our sponsors and to the fabulous team of people who helped plan and execute this event. Without them, there is no way we could have accomplished so much. I can't wait until next year.
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Last Quarter Round-Up Summing up last quarter can be done in a single word...bad. The S&P 500 finished down -8.88% for the quarter and is down -20.57% for the year. We have two different conditions playing out in the economy. First, we clearly have an economic slowdown. Second, we have a growing credit crisis that is making it difficult for companies to operate as they have become accustomed...with easy, inexpensive lending. The effects are stunning. Wall Street has changed forever as every one of our major investment banks has been taken over, filed for bankruptcy or reorganized into bank holding companies. Many view the Fed rescue proposal as the only way out. The Lehman Aggregate index was down -0.49% for the quarter. Our equity strategy last quarter favored U.S. growth stocks while underweighting international and emerging market stocks. The fixed income strategy favored inflation-protected bonds while holding positions on high-yield and long bonds. Quarterly asset class results: Large Cap -9.97%; International - 18.01%; Emerg. Mkt. -24.47%; Growth -12.45%; Value - 4.87%; Inflation-protected bonds -5.89%; Long bonds +3.94%; Hi-Yield -11.94% (See Notes)
Global Economic Outlook I must say that developing tactics for next quarter and beyond is extremely difficult in the current environment. How, and how quickly the credit crisis heals will depend greatly on the action taken in the Federal government rescue plan...if it even passes. My feeling is that the bill will pass in some form and the infusion of money into the economy will have long-term inflationary implications. Short-term, the natural deflationary tendency of the economic slowdown will likely lead to at least one rate cut before year-end. Once the bank capital problems are reduced, lowering the Fed Funds rate will help spark the lending needed to improve the economy. My equity strategy for the coming quarter is to continue to favor U.S. large cap stocks over International and Emerging Markets. The fixed-income strategy favors long bonds while awaiting rate cuts, and holding positions in inflation-protected and high-yield bonds. If the rescue bill passes, I expect the housing market to stabilize somewhat as foreclosures slow, banks write more mortgages and the inventory of homes shrinks.
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Notes: Asset class & style returns are based on the price-only performance of ETF's & ETF blends with similar respective focus. Asset class and Style results do not reflect the performance of Barron Financial Group, LLP's advisory accounts. Advisory accounts may not contain these investment strategies and may contain investment strategies not described here. Advisory services include asset management fees that are not reflected in these results. Please contact Barron Financial Group, LLP for more information about specific asset class, style or portfolio returns.
Barron Financial Group, LLP is an Investment Advisory firm
registered with the CT Department of Banking
Non-Advisory Securities offered through
Purshe Kaplan Sterling Investments, member FINRA/SIPC
headquartered at 18 Corporate Woods Blvd., Albany NY 12211 |
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