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QUARTERLY NEWSLETTER 2010 Q-2
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"TRUST, SERVICE, PERFORMANCE"
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Trent Capital Management, Inc.
| In today's economic environment, investors want and need advisors they can trust. Trent Capital's professionals are focused on the best interests of our clients. Trent harbors no self-interest that creates conflict within the investment decision process. Our structure eliminates bias, restriction and negative influence in the pursuit of achieving each client's objectives in a prudent process.
Note & Quote
"We are convinced that the intelligent investor can derive satisfactory results from pricing of either type (market timing or fundamental analysis via price). We are equally sure that if he places his emphasis on timing, in the sense of forecasting, he will end up as a speculator and with a speculator's financial results. The investor's primary interest lies in acquiring and holding suitable securities at suitable prices.....the odds are with the investor."
("The Intelligent Investor" by Benjamin Graham).
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"I can't recall ever once having seen the name of a market timer on Forbes' annual list of the richest people in the world. If it were truly possible to predict corrections, you'd think somebody would have made billions by doing it."
Peter Lynch
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From Our Investment Team
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Market
conditions may vary from period to period, yet the core tenets of Trent
Capital's investment discipline and approach remain the same. We start with the
premise that stocks represent fractional ownership in real businesses. We seek
to purchase durable businesses at value prices and hold them for the long term.
We believe that owning shares of well-managed businesses with attractive
reinvestment rates, purchased at reasonable valuations and held for years to
allow the power of compounding to work, is a reliable method for building
capital over long investment horizons.
By definition, owning shares of companies for years or even decades means that
some, perhaps all, of our investments will traverse rough patches along the
way, whether they are specific to a company, an industry or the broader market.
We know in advance that we are going to own businesses in periods of rising
interest rates, falling interest rates, inflation, disinflation, a weak dollar,
a strong dollar, and so forth. Therefore, when we think about purchasing shares
of a company, we have to weigh carefully up front whether we think the business
can withstand inevitable shocks in addition to considering the likelihood the
business can grow earnings power (and therefore intrinsic worth) over full
cycles. Then, company by company, we set out to build a durable, all-weather
portfolio of businesses that can compound over the long term.
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Plan Fees And Due Diligence
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Fees, commissions and general operating expenses of
Qualified Retirement Plans are increasingly being scrutinized by the Department
of Labor, Congress and the Securities and Exchange Commission. Onerous plan fees negatively impact
participants' retirement benefits resulting in increasing litigation.
Qualified Retirement Plans incur a certain level of fees as
does any investment related product or service.
Excess fees however, can lead to legal and regulatory implications for
Plan Sponsors. Recently there have been
a number of law suits related to the breach of fiduciary responsibility by Plan
Sponsors alleging that they were negligent in:
- Monitoring
the fees and expenses paid by the plans to determine if they were reasonable
and were solely for the benefit of plan participants.
- The
lack of understanding how service providers (Third Party Administrators,
Trustees and Financial Advisors) are compensated for their services.
- The
failure to implement and follow procedures ensuring that all fees paid to
plan service providers are reasonable and that they are incurred solely
for the benefit of plan participants and their beneficiaries.
The law suits were based upon the Plan Sponsor breaching its
fiduciary responsibility and that the failures diminished the value of
participants' retirement benefits. While
a number of the cases are ongoing, the general theme is that a prudent plan
fiduciary needs to clearly document:
- An understanding
of all fees and expenses associated with the operation of the plan.
- The demonstrated
due diligence that the fees charged are fair and reasonable for the
services rendered to the plan.
It is critical for Plan Sponsors to understand and
comply with their fiduciary responsibilities to their participants and their
beneficiaries. Just providing a
retirement plan is not sufficient in fulfilling the accountability and
standards established by ERISA.
Unfortunately some Plan Sponsors have learned an expensive lesson as it
relates to the fees and expenses of their retirement plan.
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| | Client Objectives
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One of the attributes of our firm that we feel sets Trent Capital apart
from the service provided by most investment entities offering personalized
investment services, is the level of personal communications and efforts to
which all in our firm strive for in educating each client. No investment
philosophy works all the time. Understanding this fully while becoming
comfortable with the approach and perspectives of the advisor
handling the investment management of one's assets, is a critical condition
required to realize superior long-term performance....particularly in bear
markets. When a successful long-term strategy is not working as well as hoped
for or expected in the short-term, either by advisor or client, investors too
often fall prey to the knee-jerk reactions prompted by their emotions rather
than their intellect. Educating our clients to Trent's investment philosophy and
discipline is of paramount importance not only to Trent, but to the financial
success of those investors who depend upon our services and talents. The last
thing we want a client to do is to make rash, uninformed judgments,
which usually result in wrong ones that are based upon the emotion of fear
rather than an understanding of the inherent value of discipline and
research. It is therefore our firm's charge to communicate with clients in a
beneficial manner that preempts unnecessary concerns about those investments we
make on their behalves. This is an important ongoing process to all concerned,
and one in which Trent Capital excels over the great majority of
its competition. Applying the consistency of discipline to the constancy of
research with an overlay focus on one's preservation of capital
are objectives that have provided over 23 years of success for both Trent
Capital and its clients. |
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New Rules For Your Plastic
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A summary of changes from the
Credit Card Act of 2009 include (1) Interest rates cannot be raised during the
first year of an account (2) Issuers can't impose a processing fee for online
or phone payments (3) Customer must be more than 60 days late on payments
before their interest rate can be raised on balances. If the rate goes up, it must go back to the
lower rate if the cardholder makes payments on time for six months on a
row. The law does NOT bar issuers from
charging annual fees, nor does it set a ceiling on interest rates. Issuers will still be able to slash your
borrowing limit, cancel your account without notice, and raise your minimum
monthly payment.
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For a review of your current investment programs from our team of professionals, please give us a call at 336-282-9302
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