Osprey Newsletter Oct. 2011

During this time of economic turbulence–high unemployment, rising costs, no clear direction, no one listening to each other–we are failing to look at the obvious–this is temporary.

When we experience hard times we ‘feel’ like it will go on endlessly. It never does. Things continue to change. It is against all natural forces to become completely stagnant, frozen and remaining unchangeable into the future.

The course of commerce continues to flow, waxing and waning. It seeks a balance between buying price and selling price, supplying and manufacturing, and marketing and consumption. Obviously this can get out of balance causing a temporary excess in one direction.

But it will eventually return itself back to balance.

The “recovery” will come and most people will be taken by surprise.

There are so many books out now, predicting a dire future, economic collapse, global disarray and re-alignment of powers; the rise of precious metals as the only meaningful value for trade, and loss of our present standard of living.

I’ve heard and seen this sentiment several times over the years. This time, it is different due to wide-spread belief that this heralds an end of the world scenario or the end of democracy, etc.

Imagine their surprise when people slowly wake up to the reality that companies still make great products and services and sell them and people still buy them. Companies will begin to expand and hire again. And this will sweep us into the next era, bruised, but more appreciative of our wonderful system of supply and demand.

And of course the markets will respond positively too.

Posted in Newsletters

Your Investment Philosophy

In looking at my last newsletter, it was tempting to just say, Ditto! Many places in the world seem to be in disarray (still) and our government is still grappling with serious challenges, not to mention our individual ones. I’m hoping that those who get this email have positive plans and are moving forward, no matter what you see on TV.

For all who have recently joined us and have not attended the Separating Myths from Truth, The Story of Investing, we will be calling you soon to invite you to a presentation. It is very important that you attend this event, for it describes exactly what you are doing and why with your money. We did go over this in our meetings. But I’ve found that it is common to forget. As your coach, it is my job to make sure all of our clients understand the basics of investing,  for this forms the resolve that will carry you to success.  And this isn’t information that clients are normally privy to. You will discover what Wall Street didn’t want you to know!

Your Investment Philosophy

Can it Soothe your Nerves?

I don’t know about you, but I am glad we are long-term investors–and consequently all the short-term craziness in the markets and the news is mostly irrelevant. Looking at the overall market from a historical perspective, or taking the long view, we can see the rewards for investors. If we look at the present, with the debt ceiling worries and many problems to solve, and imagine it continuing, we will likely be miserable. While the government is in turmoil–deciding the tough decisions, and watching the economy lag, there seems to be no good news.

For the short term, what does the stock market look like?

By looking at just the first 7 months of this year, we see how a short-term outlook can put you on an emotional roller coaster.

Mid-Feb.     +6.0%

Mar-Apr.     - 6.5%

Late Apr.   + 8.0%

Mid June     - 7.0%

July 1         + 7.5%

July 29         -8.0%

Is your head spinning yet?

Things to keep in mind:

We have the biggest economy in the world, with only 5% of the world’s population! The general, long-term expansion of our economy is strong and continuing. It would take an unpredictable cataclysmic event to change this course permanently.

The short-term moves of the market mean nothing in the overall expansion, but, being human, we tend to look myopically at just what is before us.

It is helpful to remember too that the politicians are well-aware of our eyes on them, and they are all posturing, and I believe, exaggerating their views so we will know how hard they are working and how hard their choices are. We can always say, “Oh but this time it is different, this is really serious, we’ve never been here before.” Yet I’ve heard this many, many times. We do get through it. It fades into the past.

Wall Street keeps us off-balance by creating the impression that we must keep making changes to our portfolios. The media thrives on the short term, urgent viewpoint, keeping the viewer glued to the TV with a continual flow of breaking news and words like dire, catastrophic, disastrous, and suggestions of market plunges.

When an investor has an investment philosophy that includes a defined strategy, and uses this strategy to manage his money, he is following a plan that he can adhere to, no matter who is in office, what the government does, and what cycle the economy is in.

An investment philosophy should give the investor peace of mind.

This is how we at Osprey look at it anyway. There will always be those whose investment philosophy says you can ‘beat’ the market and make a windfall in the short-term. This sets up high expectations and likely failure.

We don’t buy that approach. We know holding a solid, highly diversified portfolio, invested globally, while committed to the long-term, will weather any temporary crises.

Every few years we have declines. While in the decline our returns are pulled down temporarily. But during the next bull market the values rise again, just like a cork in the water.

If you are a client of Osprey Money Management we have a wealth of information in our library in addition to the seminars we conduct. If you would like to check out a DVD or book on investing with our philosophy, so you can quit worrying get on with your life, please let us know. We can send you a list of resources too.

Posted in Newsletters

Osprey Newsletter Dec. 2010

 Dear Friends and Clients,

An update on the market: the Dow Jones Industrial Averages is close to 1,000 points above where it began this year. That’s a nice increase of around 10%. Let’s see what happens these last weeks of 2010.

Those of you with investment accounts should have received a note in your last two statements about the new cost-basis reporting required by the IRS. See the box below for details.

We are also delighted to tell you that we have chosen a charitable organization called the Water Project on behalf of Clients of Osprey Money Management. Osprey Money is funding new wells in Sierra Leone for schools in desperate need of clean, fresh water. This is such a basic, necessary resource, yet in the Sierra Leone very little clean water is available.

You will be able to watch the progress of our wells! We will send you the link as the wells get underway in early 2011.

We can all follow this project and feel good about where the money is going!

We also had a successful Client Appreciation Dinner last month for those living in Central Florida. We’ve posted some photos on our website! I spoke briefly on the advantage of building the right mix of investments for you in a low cost, risk managed portfolio dedicated to the long-term. Then the task for being successful becomes: being determined to stick with the plan no matter what the news is; no matter what is going on around us. This isn’t easy, but only those with the fortitude to do this are rewarded with financial security. Even Warren Buffet says that all an investor has to do to earn a decent return is to buy a good index fund and hold on to it, year after year.

It is my wish that you ‘get’ the simplicity and clarity of your portfolio. That you understand why you needn’t listen to Wall Street and the analysts. That you have an idea  how your portfolio is different from the average account and see the big, long-term view of it.

Since embracing this simple, intelligent and proven program I’ve also made it my passion to coach other advisors.  Wall Street won’t tell us. Advisors can then make a difference in their clients and their own lives. It’s not that this is a secret; the very wealthy have been doing this all along. In fact many non-profit corporations have been doing it successfully as well.

What’s Next?

Beginning in 2011 it is our plan to begin sending you quarterly mp3 audio messages on current events, the markets and your portfolios. We are making the arrangements right now! You can listen in the comfort of your home or car.

As I close for the year, I want to thank all of you who have chosen us to handle your investments, and those of you who have referred others to us. We are honored. 

To those of you considering our professional management, we would be delighted to show you a comparison report showing your current portfolio alongside ours.

May you and your families experience a wonderful Holiday Season and a prosperous 2011 filled with happiness.

And Happy New Year!

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 The Water Project

We wanted to let you know that a donation has been made to The Water Project by Osprey Money Management, LLC.
 
The Water Project is working to provide clean water to communities throughout Africa. With this donation (from Osprey) we will dig a well in Western Kenya or Southern Sudan, providing a safe and convenient source of water to an entire community.  

The lack of access to clean water is a foundational problem in the developing world. A good education, improved health, hunger relief and breaking the cycle of poverty all begin with access to clean water. But still, today, nearly 1 billion people don’t have it.

We’re working to change that.
 
To learn more about how this gift is helping, please visit our website at TheWaterProject.org. In a few months, you’ll be able to enter the gift date on this letter and see the actual well it helped build!

Sincerely,
R. Peter Chasse
President and Founder

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New IRS Rules

Beginning in 2011:

1. When you or your independent investment advisor sell equities (such as stock) acquired in 2011, your brokereage firm, (Schwab/ TD Ameritrade/ TCA) will be required to report details about your gain or loss to you and the IRS on Form 1099-B. You’ll continue to be responsible for reporting all cost basis information to the IRS on your tax returns.

2. Unless your advisor selects another method on your behalf, your brokerage firm will likely calculate your gains and losses using the FIFO (First In First Out) cost basis method for equities, which means that the first shares you acquire of a particular stock are the first shares that will be sold.

3. When you sell an investment, the cost basis method used to calculate your gains and losses cannot be changed after your trade settles. So it’s important to consider the tax implications at the time of trade.

Contact us if you have questions or are concerned about this.

Posted in Newsletters