Are Your Assets Safe?

In light of several recent investment scandals, including Bernard Madoff and his $50 Billion “Ponzi” scheme, we want to assure you that we will NEVER place you or your assets in such a position. We hope the following questions and answers put your mind at ease. Additionally, you should confirm that ALL of your advisors could answer these questions in a similar manner.

Where Is My Money? As a client of Symphony Investment Group we have “limited trading authorization”. What this means is that your money stays in your name. Further, it is “custodied”, or actually held, at one of our trusted custodians (Fidelity, TD Ameritrade, Schwab). In addition, you never write a check to Symphony to deposit your funds. Instead, your check is written to the custodian.

What Is My Account Invested In? Symphony Investment Group believes in “full transparency”. You will know, up front, exactly what investments your account holds. We only invest in regulated, publicly traded securities such as common stock, ETFs and mutual funds. All of these are highly transparent and highly regulated.

What Is The Value of My Account? Since your account is actually held by a national custodian, such as Fidelity, you can simply access their website, or the link on our website, 24 hours a day, 7 days a week. Of course, you can always call our toll-free number for any account information.

Can I Get My Money Out? Investors in “hedge funds”, like those managed by Madoff, often are told they can only withdraw assets at specific times, and many have a “lockout” period of 1 year or more when first invested! As written in our contract, Symphony Investment Group will never charge you for withdrawing your money, nor hold you to any time commitment.

Be Prepared For Questions......

This past weekend I ran across a great article that all Retirement Plan sponsors should read. It is called: “Ten things DC plan sponsors need to do for '09”. Of course, all of these things should be done every year, but given the recent market fluctuations and economic uncertainty, 2009 will undoubtedly be a challenge for both Plan sponsors and participants. I would expect many more questions than usual from your employees, and they will probably focus on fees, and investment performance. So be prepared.....

No Place to Hide -- 2008

The S&P 500 has experienced its’ worst annual loss in history with a decline of 38.2% from the start of the year. Foreign markets, and especially emerging markets, fared even worse. (Note that most Hedge Funds also experienced double-digit losses in 2008). Investors have seen their retirement accounts decimated and are justifiably concerned. Even “balanced” accounts which are typically 60% equities and 40% bonds suffered their worst losses ever with declines in the range of 20% to 30%.

In a bear market for equities, normally bonds and bond-like securities tend to do quite well. Not just longer-term treasury securities, but investment grade corporate, munis, and even REITS (real estate investment trusts). The reason is that interest rates are usually being reduced to combat economic weakness and investment flows to those securities that are paying a higher rate of interest and have a greater perceived safety. Investors with a balanced portfolio then, in theory, can moderate the volatility and losses in their portfolio over any economic cycle. In 2008 this was not the case.

Looking forward the environment will most likely improve but at an uncertain pace. The vast majority of the price declines in stocks, bonds, and real estate are behind us, but a rapid rebound in many of these asset classes is doubtful. However, this does not mean there are not any outstanding opportunities in the current market. Corporate bonds, junk bonds, and municipal bonds all look very attractive at current levels. Stocks also have a wonderful longer-term outlook. The yield on stocks now exceeds the yield in government bonds. Stock earnings, however, could be a bit slow to recover dampening the short-term return on equities. While the year has been difficult and disappointing to many investors it is important to stay with a disciplined approach that recognizes the longer-term time horizons of investing. Let us all wish for a happier 2009.