Dear [fname]:


Below is the investment performance commentary written by our portfolio managers summarizing the investment market activity for the first 3 months of 2014. Our investment clients will see the results of the commentary reflected in their accounts.

 

Below also are the year-to-date (April) model portfolio and Archer Funds performance results. If you would like a copy of the Quarterly Morningstar Report that was issued for March 31, 2014, please call Sara Beth.
 

    Model Portfolios

YTD

    Aggressive  2.06%
    Moderate Aggressive  2.37%
    Moderate  2.35%
    Income & Growth  2.15%
    Conservative  2.01%

 

 

   

Archer Funds

YTD

    Archer Balanced Fund   2.25%
    Archer Income Fund   3.16%
    Archer Stock Fund   4.05%
       


If you would like to discuss your individual account or if your situation has changed, feel free to call me at 704-552-8689 or email me at ednewton@ednewtoncpa.com.

 

If you are not presently investing with us, you can take advantage of our offer of a complimentary review of your current investment portfolios. Along with our comments, your accounts would be reviewed by our portfolio managers. Please call me if you would like to take advantage of this offer.

 

Very truly yours,

 


W. Edward Newton, Jr. CPA, CFP®


 

Newton Financial Network
13850 Ballantyne Corporate Place, Suite 500
Charlotte, NC 28277-2830
704.552.8689
ednewton@ednewtoncpa.com
 

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.
 
 

 



                                                1st Quarter 2014

     If one were to have tuned out at the end of 2013 and returned to open his or her first quarter statements, he or she may reasonably have assumed that the markets were calmly digesting the exceptional performance of last year. A closer look under the hood reveals that the start of 2014 was anything but calm. The Standard and Poor’s 500 (S&P 500) began the year with a total return of 1.8%. After a nearly 4% decline in January, stocks rebounded sharply in February and managed to hold their gains through March. There was no shortage of tinder to feed fires of market bears as lackluster economic data, geopolitical concerns in Eastern Europe, new leadership in the Federal Reserve and persistent concerns about Chinese growth all provided headwinds to stocks. Thankfully, and somewhat surprisingly, Congress managed to stay out of the limelight as midterm elections fast approach and the debt ceiling was raised again in February almost without notice.

     Stock strength was relatively broad during the quarter as nine out of ten Standard & Poor’s sectors moved higher. Traditionally defensive sectors took the lead during the quarter as Utilities (+10.1%) and Healthcare (+5.8%) posted the strongest gains while Industrials (+0.1%) and Consumer Discretionary (-2.8%) were the notable underperformers. Time will tell how much of a lasting impact the brutal winter conditions had on these more economically sensitive sectors. Gold regained some of its luster and rose more than 5% as physical demand in emerging markets ticked higher and investors sought protection against a worsening situation in the Ukraine.

     Hopes steadily built throughout 2013 that the U.S. economy was on the verge of finally breaking out. Mother Nature dashed some of those hopes as one of the harshest winters in history caused a number of potholes on the road to economic recovery. Retail sales, housing market data and manufacturing jobs all disappointed during the quarter. The question now becomes how much of the decline in economic activity can be attributed to the weather and how much is actual economic weakness. Ultimately, it is probable expectations got a little ahead of themselves and that a combination of short-term weather related factors and a slight downshift in some economic sectors will reset growth estimates to a more attainable 2.0-2.5% growth for the year. Longer-term, we have reason to be optimistic given demographic trends and booming domestic energy production coupled with the potential for more accommodative fiscal policy and continuing monetary support.

     Janet Yellen was confirmed as the new Chair of the Federal Reserve in January. Her first official press conference resulted in brief volatility in the bond markets as she seemed to hint that the Fed could begin to raise rates somewhat sooner than expected once the “tapering” of bond buying has been completed. Bonds soon regained their footing as Ms. Yellen took steps to assure the public that the Fed will not pull away the punch bowl too soon and investors continued to grow more comfortable with the aforementioned taper. The yield on the benchmark 10-year U.S. Treasury note fell to 2.7% from 3.0%. Longterm U.S. Treasuries were the best performers (+7%) and high-yield bonds slightly outperformed investment grade corporate bonds (+3.07% and +2.94%, respectively).

     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 most investors to take a balanced approach given the investing climate. We agree with the general consensus that the 30-year bull market in bonds will end some day, but the first quarter served as an excellent reminder of the importance of diversification across asset classes. While stocks as a whole are not as “cheap” as they were a few years ago, valuations are not alarming and we see room for companies to surprise to the upside; particularly against the backdrop of sharply reduced earnings expectations.

     As investors with a long term focus, we continue to invest in companies with sound balance sheets, strong cash flow, attractive business outlooks and relatively inexpensive valuations. We maintain our discipline of investing in companies where we feel the market is underestimating the value of a business and avoiding those companies where we believe expectations are too lofty. 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.

   We welcome your comments or questions and thank you for your continued confidence. 


Regards,

The Newton Financial Network Team


W. Edward Newton Jr. CPA/CFP
®
Troy C. Patton CPA/ABV

Steven C. Demas
John W. Rosebrough CFA
 

 

You should carefully consider the investment objectives, potential risks, management fees, and charges and expenses of the Fund before investing. The Fund's prospectus contains this and other information about the Fund, and should be read carefully before investing. You may obtain a current copy of the Fund's prospectus by calling 800-238-7701 or by downloading one online at www.thearcherfunds.com.

The Fund's past performance does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800-238-7701

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Newton Financial Network | 13850 Ballantyne Corporate Place, Suite 500 | Charlotte, NC 28277-2830 | 704.552.8689