For the last few years we have spent a lot of time educating our clients on the merits of buying a combination of high quality bonds and shares in good businesses. These businesses need to pay dividends and grow these dividends overtime which drives share prices. It is this share price and the value of the bonds that we see reflected in the market values of our accounts. Despite all the other investment undercurrents, seeing this value fluctuate in the short term makes us nervous. Thankfully though, our account values are back where they were in early 2008 when the largest market fall since the Great Depression wiped masses of wealth from our portfolios.
The most significant fall occurred from March 19, 2008 to March 19, 2009. Of course during the depths of these terrifying times in the spring of 2009 we discussed that “the world is NOT ending” and values will return, likely in “18 to 24 months” like they always do. I am happy to report accounts have now recovered to their previous values as a result of the rising values over the last 19 months (As of Oct 15, 2010). This is not to say we will not experience volatility in the near term; we will. It should give us solace however that the investment landscape is never “different this time” and when we forget about the powerful messages of the past, our futures are often marred with mistakes and regrets.
Please contact us if you wish to discuss your particular rate of return during this time.