January 2016 Newsletter to Clients

Per recent commentary from CNBC…

It's been a really, really tough year for returns. According to data from Societe Generale, the best-performing asset class of 2015 has been stocks, whose meager 2 percent total return (that is, including dividends) still surpasses those of long-term bonds, short-term Treasury bills and commodities. These minimal gains make 2015 the worst year for finding returns since 1937, when the cash-like 3-month Treasury bill beat out other major asset classes with a return of 0.3 percent.

No one likes to admit their mistakes, but as you all know, we sold SGGDX (First Eagle Gold Fund) for everyone in a block trade last week. Many of you will be able to utilize the realized loss to offset gains taken earlier this year. Likewise, we’ve reduced TINY (Harris & Harris Group) to about one half percent in most portfolios. Hope springs eternal for this nanotechnology venture capital fund.  As we view the list of mutual funds in everyone’s portfolio, three gained in value last year while the rest declined. We don’t have to remind you that 2015 was a less than stellar year for the stock market. Our income funds held up fairly well in the face of fears of higher interest rates. Obviously, most investors don’t recognize the opportunity in floating rate bank loans. With the one-quarter point increase in the Fed funds rates, LIBOR (London Inter-Bank Offered Rate and the Prime Rate) our BlackRock funds will earn more income which we hope to see result in higher payouts. The BlackRock Floating Rate Income Trust (BGT) has a 5.6% current return based on annualizing the most recent monthly distribution and current price $12.50.

My first branch office manager, Bernie Katz, told me ‘Bob, your clients will not want to punish you for making mistakes as long as they understand you are trying your best.’ In the business of selecting investments errors will be made but know this- we are trying our best to serve you.

The United States economy is strong, not bubbly but steady. Nearly every indicator points to continuing growth. Unbelievably low gasoline prices will certainly fuel consumer spending. Who would have predicted the price of a gallon of gas dipping below $2.00! Mortgage rates remain low while housing prices continue their recovery.

Are you taking full advantage of Moneywatch? We are financial planners/advisors and our role is to assist you in every aspect of your financial life. Obviously, investment management is a top priority but don’t forget or neglect estate planning. None of us will live forever. Older (mature) clients will want to prepare their heirs for the money coming their way. Children are allowed to rollover IRA money left to them by their parent. You want to involve us in those decisions. We need introductions to your kids. Those kids should be utilizing our services now. Long story short, we want referrals to your children so we can begin to build a relationship with them sooner rather than later.

We’re not shy about tooting our horn in that many of you have been with us for well in excess of 20 years because of our good advice. We never promoted Moneywatch based on year to year investment performance but rather on being there for the long term.

Thank you for your continuing confidence.

Past performance is no guarantee of future results. The opinions expressed are those of Moneywatch Advisors, Inc. and are no guarantee of the future performance of any particular fund. This information is for educational purposes only and is not intended as investment advice. Please consult your financial advisor for more detailed information or for advice regarding your individual situation.