Three Model Portfolios Designed to Help You Sleep Well At Night

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Sunday, December 07, 2008

December 2009 Update

Looking Forward and Back The stock market staged a nice rally of over 19% as measured from the bear market lows that occurred on November 20, 2008. From its record high on October 9, 2007, to its low this year of 752.44 on November 20th, the stock market declined 52% from its all time high value, bringing the index to its lowest level since April 14, 1997. There remains an incredible amount of volatility in the market.

Subscribers are reminded that even bear markets can produce powerful moves to the upside such that if you need to rebalance the equity side of your portfolio and move more to the fixed income side, it is always better to sell into strength.

During November, Treasuries posted their biggest monthly gain the 1980s. Underlying the unusually strong demand for U.S. government bonds is the fear factor as investors look for the safety of a bond that is backed by the only entity with a legal printing press. Also contributing to the surge in Treasuries is a decreased fear of inflation.

As we head toward the end of calendar year 2008, we are reviewing the holdings in our model portfolios to determine if rebalancing, or a substitution would benefit our subscribers going forward.

Interest rates for “safe investments” are near record lows. The three-month Treasury bill is only paying 0.04% interest. [See US Treasury Rates at a Glance] After commissions, you could lose a little bit of money as investors are more interested in “return of assets” than they “return on assets.” We recommend CDs with FDIC insurance over US Treasuries at this time. We may move our bond funds to CDs for 2009.

The Retirement Advisor Portfolio

Value on 11/30/2008


Model Portfolio 1



Model Portfolio 1



Model Portfolio 1



DJIA 12,501.52 on 1/1/2007



S&P500 1,418.30 on 1/1/2007



The Retirement Advisor Model Portfolios all began with $200,000 on 1/1/2007

Inside This Issue


Looking Forward and Back


Social Security Payback


Certificates of Deposit


Federal Reserve, US Economic Growth


Economic Outlook & US Treasury Rates


Model Portfolios


Recommended Mutual Funds


Subscriber Information

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