~Investment Advisory Bulletin~ March, 2003
Text Box: As a sharp-eyed reader of the Werner & Co. quarterly newsletter, you probably noticed that this issue is arriving one month late. I must confess that I too have become victim of the discouragement that has grown as our now three-year bear market has deepened. Since last October we had one good month up 6% followed by three months of declines totaling (8.5%). And this comes on the heels of three declining years of (4%), (10%) and (23%), annual drops in the S&P 500 index.
Text Box: In the face of this continuing bear market and the unsettling international situation in Iraq, how do we invest? The February results highlight the difficulty of this decision in that every single investment category was down approximately the same, (2%), with the exception of fixed income. And fixed income, which has been positive as interest rates have fallen, will become a loser once interest rates turn upward. All of this continues to lead me to an investment course calling for a diversified portfolio with positions in growth, value and income securities. Given all the uncertainties involved, keeping a substantial portion in bonds and cash for the coming few months appears prudent. Surprisingly most of the investment sources that I respect are predicting a strengthening economy and improvements in the equity sectors to come this year. I am cautiously betting that they are right!
Percentage Returns
November December January February
All Funds 6.1 (4.6) (2.0) (1.9)
Aggressive 6.9 (6.7) (1.9) (1.9)
Growth 6.2 (5.0) (2.4) (1.9)
Tech 16.9 (12.8) (0.3) (0.8)
Style/Growth 6.8 (7.2) (1.9) (1.5)
Style/Value 5.5 (3.2) (2.1) (2.3)