It is nice to see the recent improvements in the capital markets. Since the low point of March 9, 2009, the world’s capital markets moved significantly higher and the Efficient Index Strategy equity portfolios are now positive for 2009. We remain optimistic for the future and appreciate the trust and confidence you have had in us as we navigate through these challenging times.We appreciate your calm and thoughtful response to the media’s constant focus on the issues of the day. As always, if you have anything at all that you would like todiscuss with us, please give us a call. We are here for you.
Dimensional Fund Advisors (DFA) recently issued proxy ballots to all shareholders of the DFA institutional mutual funds. We understand that many clients have received calls from the proxy voting service hired by DFA, the Altman Group. We apologize if this has inconvenienced you in any way and wish that we would have been able to provide you with advance notice. Due to regulations, DFA was unable to let us or our clients know that a proxy vote was forthcoming. It has been over 10 years since DFA has had a proxy vote and we do not anticipate this happening more frequently.
DFA has reached the goal of 51% of the outstanding shares voted for the funds involved. The items that clients voted on will ultimately make shareholder communications more streamlined thus lowering your overall fund costs. We appreciate your attention to this matter, and thank you for your patience and support throughout the process. If you have any questions or feedback regarding the proxy voting, please let us know.
In addition to the declining balances of equity portfolios this past year, clients’ families have been impacted in ways that we did not imagine. Changes in housing, consumer spending, employment, and the credit markets have affected most families in some way and are likely to have an impact in the future.
Challenging economic periods can cause individuals and families to reevaluate what is most important and how to best prepare for the future. Many retirees and the soon-to-be-retired are taking another look at their net worth and income sources, and are modifying their expectations. Premier’s clients have typically spent their lives working towards self-sufficiency and have taken a conservative approach to retirement. It appears that the rest of the country is trying to move in this direction as well. Individuals are working towards being less reliant on the government as the uncertainty surrounding the national debt increases and the full impact of the baby boomers on Social Security and Medicare unfolds. This is a time when everyone hopes for the best but should be prepared for the worst.
Premier’s financial planning approach to guiding clients allows us to remain focused on those areas that we can control rather than the areas we cannot. This includes making sure that clients have sufficient cash reserves based on their expenses and potential cash needs. Clients have also been increasing the level of fixed investments they have in their portfolios to reduce volatility and to provide security. Some investors have decided to delay retirement in order to continue to accumulate assets rather than begin taking distributions. Others have had to reduce their systematic gifting to family members or charitable gifting to ensure that they will have sufficient assets for their lifetime.Time to Reevaluate
Many investors have been reevaluating whether or not to continue to hold assets, such as individual equity positions or certain real estate holdings, that may have specific inherent risks. Although prices are much lower than they were one year ago, some investors are choosing to sell certain investments in order to transfer the specific risk to someone else, and in turn, are increasing their fixed investments or increasing diversification within their portfolio. We have been meeting with more investors lately who are seeking another opinion regarding their investments. We are currently offering a free, second opinion service to investors who you may know that need to reevaluate their financial picture. Please feel free to send them to Premier to meet with one of our Certified Financial Planners. They may contact us at or FREE. We appreciate you thinking of us when you become aware of someone who may benefit from our services. As always, we will do our best to provide value to anyone with whom we speak.
As the economy suffers, non-profit organizations and charitable entities suffer as well. Charitable donations are down and non-profits are being forced to reevaluate their services. We were recently asked to participate in a program to help fund the Humboldt Area Foundation annual donor yearbook, their hallmark communication to the community. We are pleased to announce that we were able to help sponsor the yearbook for next year and that we hope to do this on an annual basis. We encourage you to continue to donate to the organizations that you appreciate, as they need your donations now more than ever. Premier’s clients have always been a fiscally responsible group allowing for generosity and good works to happen in our communities.
Premier’s Response as a Business
Many clients have asked how our firm is doing and we are glad to share that we are functioning well during this market downturn. Although our revenues have declined significantly this past year, we are pleased to share that we have not had to lay off any team members. Our team continues to seek ways to save costs while adding value and service to clients. We continue to run a reasonable and sound budget which allows us to successfully work through financially challenging periods such as this.