Well the calm first six months that I described in my July letter was quickly replaced with a volatile market which included some pretty wild swings in equity prices. First there was the thought that the Fed would raise the interest rate significantly, so the stock market dropped. That didn’t happen so the market reversed its course. China has had some problems and reacted in ways that had not been expected, markets moved. Commodities continue to decrease in price, the price drop in oil being the most noteworthy to households in the United States, last weekend I saw gas at less than $2 per gallon! These concerns along with continued issues in the Middle East and Eastern Europe create great confusion in the markets.
But with all this turmoil and underlying volatility the Dow Jones is trading at about 17,600. If you refer back to my July report you see that the Dow Jones was at about 17,800. It is down a little, and it is still lower than it was back in the beginning of the year, but no real cause for concern. At the October meeting of the Investment Advisory Committee we reviewed the allocation of assets amongst the existing asset classes and have decided that the current allocation gives us the best opportunity to grow assets without taking on too much risk.
During the year the Investment Advisory Committee did lengthen the duration of the Fixed Income portfolio and enhanced the creditworthiness of the portfolio. In light of the Fed’s decision to not raise interest rates this decision has been good for the funds.
So our journey continues, we adhere to our strategy and look forward to sound long term growth in the various funds.
Wishing You a Happy Autumn,