Fourth Quarter 2012 Client Letter


This month marks our 25th year providing investment strategies as a Registered Investment Adviser. We are proud to say that we have current clients who have been with us since Day One.  Through the ups and downs of the markets, political and worldwide
crises, mind-blowing technological advances and anything made by Apple we have worked together with you on your financial future. Since I have been in a reminiscing mood of late, I am reminded of a television show that many of you might also remember!


That Was The Week That Was,also known as TW3, was a British satirical comedy program hosted  by David Frost, which aired on BBC Television in 1962 and 1963. An American version by the same name aired on NBC a couple of years later, also featuring Frost. It broke ground in comedy through lampooning the establishment and political figures.  Frost often ended a satirical attack with the remark, "But
seriously, he's doing a grand job."


 This show came to mind when we received a Christmas card from two friends, both journalists. Their annual missive recaps
the events of the past year as it affected their family. With their permission I quote: “Anyhow, 2012 was an odd one. Since it was Leap Year, we were prepared for it to run a day longer.  Then Hurricane Sandy blew in and suddenly it felt two weeks shorter. It’s amazing how many things don’t get done when you have no power, heat or running water for 13 days.”   Susan and I were lucky as we only experienced 6 days of no electricity or heat and no downed trees. Many of our neighbors are still cleaning up from this super storm. And That Was The Week That Was, indeed!


 With 2012 now closed, I would like to take a minute and reflect on the year that was. During the past year we experienced “QEternity” as in Quantitative Easing, which referred to the Federal Reserve continuously pumping money into the system to artificially keep interest rates low.  If you recast your mortgage during 2012, you can thank the Fed for your historically low rate. Gold, commodities
and most areas of the fixed-income space underperformed stocks.


Other events that marked 2012 as an “odd year” were, in no particular order, the drought that destroyed a significant part of the corn
crop in America’s farm belt, a housing recovery, a mid-year Supreme Court decision that upheld ObamaCare, the presidential election and finally the “fiscal cliff” which we brought to your attention in our third quarter letter.


During the year we came across a couple of new acronyms in our surveillance of Washington. Two that caught my attention were SCOTUS AND POTUS. If you didn’t take notice they are the Supreme Court of the United States and the President of the United States. 
It seems that everything can be transposed into an acronym!


The past year proved to be a positive year for world equities despite a number of macroeconomic challenges. Markets across the globe registered strong gains. Domestically, the S&P 500 registered a solid 13% gain and was slightly outperformed by the Nasdaq and
Russell 2000. The Dow Jones Industrial Average trailed these broader based indices while the Dow Jones Utilities Index
finished slightly in the red.


So That Was The Year That Was. And despite all the uncertainties which come with every New Year, we still very much enjoy working with you as much as we did when we first started.


Thank you for the trust you have placed in us. We shall continue to work diligently to meet your investment needs. If there are any changes for your financial situation or investment objectives, or if you wish to place and/or modify any reasonable restrictions to the management of your account, please contact us.


Wishing you the very best in 2013. We look forward to the next 25 years with  eager anticipation.