To Our Investment Clients:


Below is the investment performance commentary written by the Archer portfolio managers summarizing the investment market activity for the 3rd Quarter of 2013. Our investment clients will see the results of the commentary reflected in their accounts.

 

Below are the year-to-date (September) model portfolio and Archer Funds performance results. If you would like a copy of the Quarterly Morningstar Report that was issued for September 30, 2013, please call Jordana at extension 120.
 

    Model Portfolios

YTD

    Aggressive  7.23%
    Moderate Aggressive  5.88%
    Moderate  4.70%
    Income & Growth  3.06%
    Conservative  1.85%

 

 

   

Archer Funds

YTD

    Archer Balanced Fund   4.06%
    Archer Income Fund   -0.39%
    Archer Stock Fund   10.79%


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 at (240) 316-3564 or email me at kgrow@esullivan.net.

 

Very truly yours,

 

Sullivan & Company, CPAs

 


 



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.
 
 

 



                                               3rd Quarter 2013

     Stocks shrugged off uncertainty about the health of the global economy, the future policy stance of the Federal Reserve, the threat of a government shutdown and the prospect of a default by the U.S. Treasury to continue their march higher. The Standard and Poor’s 500 index (S&P 500) gave back some gains as September came to a close and a shutdown became more likely but still managed a return of 5.24% during the quarter. The market is now nearly 20% higher year to date.

     Stock strength was broad once again during the quarter as nine out of ten Standard & Poor’s sectors moved higher. Materials stocks led the way higher (+10.3%) followed closely by Industrials, Consumer Discretionary and Healthcare. Financials were a surprising laggard (+2.9%) and Telecom (-4.4%) was the only sector to turn in negative performance for the quarter. Gold regained some of its luster and rose more than 7% as investors contemplated the risks of a government default.

     While certainly nothing to get excited about, the U.S. economy continued its slow yet stable pace of growth. GDP growth remains stubbornly low with the consensus penciling in approximately 2.0% growth for the year and a somewhat rosier 2.5% for 2014. The unemployment rate continues to marginally improve and manufacturing has strengthened on the back of strong auto sales. Consumer spending has held up well, but the sustainability of the recovery in the housing market has come into question in some circles as mortgage rates rise. Declining energy costs and the wealth effect created by the ongoing bull market are clear positives for U.S. consumers, but uncertainty in Washington and a suboptimal job market have muted consumer confidence to some degree. Stock and bond markets alike paid relatively little attention to economic releases themselves and were more concerned with the Federal Reserve's game plan. "Who will be the next chairman?" and "Will they or won't they taper?" received significantly more attention than the normal menu of economic data. As the quarter closed, Fed expectations were right back to where they started a few months ago; Janet Yellen is the nominee and extraordinarily easy monetary policy will continue for the foreseeable future.

     The focus on the Fed created some significant volatility in the fixed income markets as the benchmark 10-year Treasury note yield rose from 2.5% to 3.0% and settled back to 2.6% when the Fed delayed its plan to taper asset purchases. Corporate bonds continued to outperform government bonds as investment grade U.S. corporates rose .90% and high-yield ("junk") bonds returned 2.25%. Municipal bonds were among the losers in the bond market posting an aggregate total return of -0.41%.

     We maintain our cautiously optimistic view of the stock market. 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. A return to stronger growth expectations for 2014 could propel the markets further, while clumsiness by the Fed and ineptitude of our elected leaders pose the most immediate risks to stock prices. The European front has remained relatively quiet, but we continue to monitor developments across the pond as potential catalysts – either positive or negative.

     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. And while central bankers have done everything in their power to depress interest rates, the bias, in our opinion, is for a slow climb in bond yields.

     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. 



The Archer Funds

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

 

 

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 herein do not represent actual client portfolios or results. 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.

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