Stay the course!

For the past 18 months, ASAM has been preparing clients for the eventual negative performing year in regards to their portfolios. Well, 2008 may just be that year. We are only half way through 2008, and the S&P 500 Index is down roughly 12%. Since October of 2007, the same index is down 19% (JP Morgan Market Insight Series).

The power of diversification is most noticed at times like these. The inclusion of fixed income instruments help stabilize client's portfolios during turbulent stock market periods. These instruments include: investment grade bonds, non-traded REITs, emerging market debt, and international bonds, just to name a few. If your portfolio is down between 2% and 8% through the mid-way point of 2008, then our diversification strategy has been successful. As we have been saying all along, our job is to protect the downside and let the upside take care of itself.

Is it Time for a Review Meeting (Or Just a Visit to the ASAM Therapy Chair)?

This is no time to bury your head in the sand… you are not alone! Other clients are probably feeling the same way you do. It does not matter how many times ASAM tells you to expect volatile markets. You are still human and most likely will feel a bit jittery after reading the newspaper or watching the 11:00 news on a bad day in the stock market. Do not confuse the market with your portfolio! If the S&P 500 Index or the Dow Jones Industrial Average (DJIA) drops 4% in a week, that does not mean that your portfolio has dropped 4% that week. For example, exposure to these stock market indexes may only be 20% (meaning the portfolio may have dropped less than 1%).

ASAM's Focus for the 2nd Half of 2008:

Control what is controllable. We do not have the power to shift the direction of the S&P 500, but we do have the ability to evaluate other investment cost cutting opportunities and to focus on reducing the tax implications of portfolios. In the 2nd half of 2008, we will be providing each client with recommendations to address each of these variables. Basically, a .25% expense reduction on a $2 million portfolio can be equal to a $5,000 increase in portfolio value.

As per the suggestion of our 2008 Board of Advisors, ASAM will increase the amount and vary the format of communication with clients. One initiative is to conduct quarterly conference calls to give clients some much needed market perspective as well as to address any specific investment related issues. We will also be holding web-based meetings with our out-of-town clients to come as close to replicating an in-office review meeting as possible.

ASAM would love to get input from you. If you have a topic of interest or a means of communication that you prefer, please let us know (via email or phone call) so that we may better service you and possibly other clients.

Thank you once again for trusting ASAM with such an important element of your life.

Warmest Regards,

Stuart Horowitz, MBA, RFC, CFP®
Senior Partner

Andrew G. Rosenberg, Esq. CFP®
Senior Partner