To our clients:


Below is the investment performance commentary written by the Archer portfolio managers summarizing the investment market activity for the 1st Quarter of 2013. Our investment clients will see the results of the commentary reflected in their accounts.

 

Below also are the year-to-date (March) model portfolio and Archer Funds performance results. If you would like a copy of the Quarterly Morningstar Report that was issued for March 31, 2013, please call Jordana at extension 120.
 

    Model Portfolios

YTD

    Aggressive  7.00%
    Moderate Aggressive  5.70%
    Moderate  5.00%
    Income & Growth  3.79%
    Conservative  2.90%

 

 

   

Archer Funds

YTD

    Archer Stock Fund   7.61%
    Archer Income Fund   0.63%
    Archer Balanced Fund   5.66%


If you would like to discuss your individual account or if your situation has changed or would like more information, feel free to call me, Kathy at (240) 316-3564 or email me at kgrow@esullivan.net.

 

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 the portfolio managers at Archer Investment Corporation. Please call us if you would like to take advantage of this offer.

 

Very truly yours,

 

Sullivan & Company, CPAs

 

Kathleen F. Grow, IAR, EA

Financial Advisor and Tax Professional

 

Investment Advisor Representative

Registered Investment Advisor (RIA) through Archer Investment Corporation.

Paul F. Sullivan, CPA, IAR

 

Enrolled Agents (EA) demonstrate special competence in tax matters by written examination administered under the oversight of the IRS. They can represent clients before the Internal Revenue Service.


4709 Montgomery Lane | Bethesda, MD 20814

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.
 
 

 



                                           Market Commentary - 1st Quarter 2013:

   Stocks resumed their climb over the wall of worry in the first quarter. The Standard & Poor’s 500 index (S&P 500) rose 10% during the quarter, the strongest first quarter since 1998, to a new all-time closing high. International market performance was mixed. Japan was up nearly 12% as the Bank of Japan telegraphed a plan to add massive amounts of liquidity to their markets. Meanwhile, emerging markets as measured by the MSCI EM Index, declined in price by roughly 2% as Brazil and China, two major EM economies, suffered from renewed policy tightening measures. Europe muddled its way to slightly positive returns as Cyprus became the most recent European nation to get in over its head and require a life-line from European policymakers.

 

   First quarter stock strength was broad during the quarter as all ten Standard & Poor’s sectors moved higher with seven of the ten sectors turning in double-digit total returns. “Safe” sectors outperformed as Health Care (+15.8%), Consumer Staples (+14.6%) and Utilities (+13%) led the way higher while cyclical sectors such as Materials and Technology brought up the rear returning 4.8% and 4.6% respectively. Commodities, as measured by the GSCI Commodities Index (+1.3%), underperformed thanks to a nearly 5% decline in gold prices.

 

   As seems like the case for an eternity, the economic picture remains cloudy and the U.S. remains stuck in neutral. GDP growth remains stubbornly low with most economists now penciling in 2% growth or less for 2013. The unemployment rate has improved slightly, however many are pointing to the lowest labor participation rate in a generation as the primary cause. A reduced unemployment rate is welcomed, but a reduced rate because fewer people are looking is clearly not a recipe for economic growth. There are, however, some bright spots in the economy as new car sales and housing starts have hit their highest levels since 2008. Some of this rebound no doubt is being driven by a rebound in household wealth thanks to the continued strength in the stock market.

 

   Once again, higher risk securities outperformed in the bond markets as investors continued to sacrifice credit quality for yield. High yield bonds were the best performers in the fixed income arena returning 2.9% while investment grade corporate bonds inched up .05%. The benchmark 10-year U.S. Treasury yield rose slightly during the first three months of the year and settled at 1.85% as the quarter came to a close.

 

   The U.S. economy continues to recover, albeit at an alarmingly slow pace and we maintain our cautiously optimistic view of the US stock market. At this point, the market as a whole appears to be fairly valued, neither overly cheap nor expensive. Central banks around the globe continue to provide the markets with a tremendous amount of liquidity which has enabled stocks to keep marching higher. At some point however stronger growth will become a necessity.

 

   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 uncertain climate. Slow but steady corporate earnings growth coupled with ongoing loose monetary policy keeping interest rates low should continue to drive money away from cash and into stocks.

 

   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. 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 Archer Team


Steven C. Demas
Troy C. Patton CPA/ABV
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

Distributed by Arbor Court Capital, LLC, 2000 Auburn Drive, Suite 120 Beachwood, OH 44122

Copyright © 2013, Archer Funds, All rights reserved.

 

 
 

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