Q32006 Investment Review
It was not long ago when the world's financial markets seemed stuck in the mud, with concerns abounding regarding runaway inflation, higher energy prices, collapsing home prices, and a slow down in economic growth. There was turmoil in the Mideast and a constant threat of terrorism. Markets were negative for the year, with much worse feared. In fact, we are only nine or ten weeks removed from this foreboding atmosphere. But, as the moods of the financial markets go, ten weeks is a lifetime, and ten months an eternity. The Dow Jones Industrial Average is now at a new high and exuberance is all around.

Clients of Arrival Capital also have reason to celebrate, with most accounts at or above all time highs. Our average client account is up almost 9% this year, compared to the S&P 500's 7% return. But we temper our enthusiasm only to note that the Arrival Capital approach is to think in years, not months, and certainly not weeks. Stocks may go up and down, but smart investments, with underlying value that you can measure, have a way of holding on in down markets and moving higher as their intrinsic worth comes to light. These are the investments we seek, whether they be an undervalued energy company, an investment firm emerging from scandal, a well-managed industrial firm, or even an index of an entire country's stock market.

Investing is ultimately about making smart decisions. But it is also about patience, observation, and constant study. An investor must know what is going on both on the surface and beneath it. She must be aware of the latest trends and worries, but not consumed by them. One of our biggest challenges, given how closely we follow the day-to-day goings on in the financial world, is not to be swayed from a disciplined, clear-eyed approach to building wealth. Avoiding the temptation to trade based on short-term factors is what often allows an investor to find true long term opportunities and have the cash to act on them.

As autumn turns colder in the weeks ahead, there will undoubtedly be more worries and concerns. The elections loom, as does the important holiday shopping season. How cold will the winter be? As we do not have the answers to these questions, a diversified portfolio of sound investments will allow client portfolios to weather most short-term storms and generate wealth over the long term. We say smile over short-term success but sleep well with a long term plan. Arrival Capital is now more prepared than ever to handle all your wealth creation needs and those of any interested friends, family, and colleagues. Thank you for sticking with us and for your confidence.
- posted by Jay @ 2:50 PM