SMA Performance through 12/31/2008

By on January 10, 2009


It has been widely reported that 2008 will go down as one of the worst years on record for stock markets worldwide. The 10 year period ending in 2008 is reportedly in the worst 4% on record for U. S. stocks.

In this lousy environment, the performance of the conservative portfolio was favorable beating the S&P 500 by 5.5% annually over the 10 year period. This is undoubtedly due to its heavier concentration in bonds and high dividend paying equities. However, in 2008, even the conservative portfolio was taken out to the woodshed due to the lashing given lower quality bonds (i.e. Putnam Premier Income Trust) and nearly all equities.

The aggressive portfolio has beaten the S&P 500 by 4% annually over the past 10 years which is surprising since it has never held an energy stock until E N I Spa was purchased on October 16, 2008. More attention will be afforded in the future in maintaining adequate diversification across all major sectors of the market.

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