Q2 2009 Investment Review
The recent July 4th holiday weekend was a time to relax and enjoy the summer, as well as celebrate the country’s birthday. Anyone thinking about the state of the United States with more than the usual state of concern could be forgiven as the economic crisis, recession, federal and state deficits, and severe unemployment should give us all pause about the future. Such reflection is not a bad thing for both the larger community and our personal financial lives. The community reacts through our political system and involvement with causes larger than ourselves. On the personal financial level, we must all make a myriad of decisions that bring us, like it or not, into the heart of the financial system. What bank to choose? What types of accounts, retirement products, and insurance. What to do with our excess cash and savings?

These questions have all gotten more complicated in the past two years as bastions of the economic system have come under siege, companies have collapsed and old expectations been dashed. That things have gotten harder is clear, yet we still have those savings to protect, not only from outright losses but also from inflation, as well the weakening of the currency itself. We still have futures to plan for, children to educate, retirements to fund.

More than ever, a clear-eyed assessment of our investment and planning options are required. We plan and invest not because we know what the future will bring but because we do not know. We do know, however, about the many investment approaches there are and the various stocks, bonds and other savings vehicles that can flesh out those approaches.

Arrival Capital continues to adhere to a value approach, though tempered to the realities of the day. What that means is that the decline in stock and many bond prices over the past two years, even with the Spring recovery, has created many investment opportunities in companies with solid brands, products and/or management selling for cheap prices with a meaningful margin of safety built in. That doesn’t mean further declines are out of the question, but we remain confident a portfolio can be assembled of diverse companies, often paying meaningful dividends, that can weather further storms and also rise substantially when the sun shines once again, an approach borne out in Q22209 for Arrival clients.

Value investing also means an approach to preserve the value of our money, So in addition to sectors such as healthcare, retail and industrials, we also look to shares of materials and energy companies, as well as foreign stocks and short term bonds to diversify away from the dollar and/or protect against a rising tide of inflation that may only be a year or two away.

We urge anyone with questions about whether their investment management and financial planning needs are adequate to reach out to us for a frank assessment. We also thank all our clients for their confidence. We will get through this period together and, through maintaining our financial staying power and flexibility, we will be able to capitalize on the many favorable investment opportunities sure to lay ahead.

Finally, there are now more ways to keep in touch with Arrival and hear what our thoughts, big and small, are. Visit our web blog at www.arrivalcpaital.com, and our video investment reports at our video channel, arrival capital, on YouTube. We are also now on Twitter at jayarrival. Let us know what you think.
- posted by Jay @ 3:44 PM