To our clients:


At the bottom of this email are 3rd Quarter 2012 Investment Performance Comments written by our portfolio managers summarizing the investment market activity for the 3rd Quarter. If you would like a Morningstar Report for September 30, 2012 for your portfolios or funds, please call us.

In addition, below are the year-to-date (9/30/2012) model portfolio performance results.
 

    Model Portfolios

YTD

    Aggressive 10.74%
    Moderate Aggressive   9.73%
    Moderate   9.51%
    Income & Growth   8.70%
    Conservative   7.59%

 

 

   

Funds

YDT

    Archer Balanced Fund   7.17%
    Archer Stock Fund 10.28%
    Archer Income Fund   6.36%


If you would like to discuss your individual account or your situation or receive more information, feel free to call me at (704) 552-8689 or email me at: ed@ednewtoncpa.com

 

Regards, Ed

W. Edward Newton, Jr. CPA, CFP®



Newton Financial Network
13850 Ballantyne Corporate Place, Suite 500
Charlotte, NC 28277-2830
704.552.8689
Email: ednewton@newtoninvestments.com
Website: http://www.NewtonInvestments.com

This electronic message contains information from the advisory firm of Newton Financial Network, which may be confidential or privileged. The information is intended to be for the use of the individual or entity named above. If you are not the intended recipient, be aware that any disclosure, copying, distribution or use of the contents of this information is prohibited. If you have received this electronic transmission in error, please notify us by telephone (704-552-8689) immediately.
 

The opinions contained herein are not intended to be investment advice or a solicitation to buy or sell any securities. Information obtained from sources deemed to be reliable, but accuracy or completeness is not guaranteed. Past performance is not a guarantee of future results. Performance figures contained herin do not represent actual client portfolios or results. Actual results may significantly differ from the model portfolio returns presented. Archer Investment Corporation manages the Archer Funds. You should carefully consider the investment objectives, potential risks, management fees, and charges and expenses of the Funds before investing. The investment return and principle value of an investment in the Funds will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The Fund prospectus contains this and other information about the Fund, and should be read carefully before investing. You may obtain a current copy of the prospectus by calling 800-581-1780.
 
 

 



3nd Quarter 2012

Stocks moved higher during the third quarter as investors generally cheered policymakers’ actions around the globe. The Standard & Poor’s 500 index (S&P 500) posted a total return of 6.35% during the quarter and has returned over 16% to investors through the first three quarters of the year. European stocks outperformed the U.S. with the DJ Euro Stoxx index surging over 8% as the European Central Bank (ECB) sought to assuage the fears of an imminent collapse of the European Union. To say that the quarter was “macro driven” is an understatement. The S&P 500 rose by 78 points during the quarter, but stripping away the five days surrounding ECB and Federal Reserve (FED) announcements, the index was relatively unchanged. The ECB made clear to investors that they are willing to do whatever it takes to keep the eurozone together. Our own central bank, the FED, followed suit by announcing a new, open-ended round of so-called quantitative easing in an effort to further reduce mortgage rates and spur employment growth.

The rising tide lifted nearly all sectors as energy, materials and financial services led the way higher. Traditionally defensive sectors such as utilities and consumer staples moved slightly higher, but underperformed as investors took their cues from policymakers and added risk to their portfolios.

The economic picture remains cloudy. GDP growth continues to disappoint, unemployment remains stubbornly high and a number of companies dialed back their growth expectations as the quarter came to a close. However, some rays of hope have emerged as it appears that the domestic housing market is gaining more stable footing every day. Individuals and corporations have continued to improve their balance sheets and liquidity in the marketplace is plentiful.

In the bond markets, like the stock markets, higher risk securities outperformed. The benchmark 10-year U.S. Treasury was relatively unchanged and closed the quarter yielding approximately 1.65%. Emerging market bonds were the best performers followed closely by high-yield and long-term, corporate bonds. Mortgage backed bonds also held their own as the FED assured the market that there would be no shortage of buyers for the foreseeable future.

We remain cautiously optimistic about the markets in general. The U.S. economy continues to recover, albeit at a painfully slow pace and, as discussed above, it appears that policymakers will maintain their accommodative positions for the foreseeable future. Earnings season begins shortly and expectations have been meaningfully dialed back leaving room for potential upside surprises. The impending elections, the well publicized fiscal cliff, and the situation in Europe will likely continue to add to volatility until the resolution of each becomes clearer. Reasonable stock valuations, extremely accommodative monetary policy around the globe and relatively balanced sentiment are supportive.

As investors with a long term focus, we continue to invest in companies with sound balance sheets, strong cash flow, attractive business outlooks and inexpensive valuations. Within the fixed income markets we remain selective and take advantage of opportunities when they present themselves by focusing on both the return of and the return on principal. Based on current valuations, we continue to view equities as relatively more attractive than bonds for a long-term investor, but we believe it is prudent for investors to take a balanced approach given the uncertain climate.

We welcome your comments or questions and thank you for your continued confidence.
 
Steven C. Demas
Troy C. Patton CPA/ABV
John W. Rosebrough CFA
Portfolio Managers

 

 
 

W. Edward Newton Jr.  CPA, CFP® | 13850 Ballantyne Corporate Pl, Ste 500 Charlotte, NC 28277-2830
(704) 552-8689 | www.ednewtoncpa.com