To our clients:


Below are 3rd Quarter 2012 Investment Performance Comments written by the Archer portfolio managers summarizing the investment market activity for the 3rd Quarter.  For our investment clients that invest through us using Archer Investments, you will see the results of the description below in your accounts. 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%


Many of you are invested in the portfolios.  If you would like to discuss your
individual account or your situation or receive more information, feel free to call me at 240 316-3564 or email at kgrow@esullivan.net

 

Kathy

 

Kathleen F. Grow, IAR, EA

Financial Advisor and Tax Professional

 

Registered Investment Advisor (RIA) through Archer Investment Corporation.


Direct Dial (240) 316-3564 | Phone (301) 657-8080 Ext 135 | Fax (301) 657-9055
Website:
www.esullivan.net | E-mail: kgrow@esullivan.net
 

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..

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


Archer Investment Corporation
Steven C. Demas
Troy C. Patton CPA/ABV
John W. Rosebrough CFA
Portfolio Managers

 

 
 

Sullivan & Company | Certified Public Accountants | 4709 Montgomery Lane #201 | Bethesda, MD, 20814 | 301-657-8080