| 2009 2nd Quarter Newsletter |
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April 2009 Fear and anxiety permeate the current investment climate. The U.S. unemployment rate reached a high of 8.5% last week, and the trend looks uncertain as we look forward. Employers have cut a total of 5.1 million jobs since the recession began, which is clearly the biggest drop-off in employment in decades. Analysts posit that the economy will improve as the year wears on, as various government stimulus efforts take root and flourish. Politicians are learning on the fly what works and what doesn't, as they try to assemble solutions to our national crisis. The last time that unemployment reached the current level was in November 1983, when the economy was reverberating from the 1981-1982 recession that pushed the unemployment rate to almost 11%. At that point, Federal Chairman Paul Volker raised interest rates to slow down the soaring inflation, following the fuel crisis of the 1970s. Investors worldwide are demanding greater transparency and a clearer connection between the multi-trillion dollar sums that are being discussed and who the eventual recipients of the funds will be. Many investors are still baffled by the lack of connection between an economy still in decline and the stock market that appears to be building a base. For most of our clients, we have developed a risk-adverse asset allocation to deal with the current financial crisis. If you feel that you would like to consider an asset allocation that is more opportunistic, please give us a call and we will review our best ideas with you to take advantage of emerging opportunities. No one knows whether the markets are beginning to stabilize now, but we want to be attentive, should you feel that you want to develop a more assertive asset allocation. On the home front, Pennsylvania Capital Management will be updating your client profile and documents to prepare for a very significant tax law change that could well affect you personally. Beginning in January 2010, there will be an opportunity for each of us to roll over our IRA and certain pension portfolios into a Roth Conversion IRA, regardless of your current income. Our Client Service team is currently reviewing your client document file and will be discussing with you additional information we will need to perform the proper research on your behalf. It's that time of year again, when we get to offer you a copy of our latest and greatest 2009 PCM Privacy Statement, and here it is. Should you desire an updated copy of our ADV Part II, please call the Client Service team for our latest copy. Spring is just around the corner and we are very excited to see the emergence of blooming trees and spring flowers, as well as renewed confidence in the world's financial markets. In your daily life, keep an eye out for signs that the initial market recovery we have seen over the last several weeks is continuing. If you're feeling comfortable enough that you want more market exposure, call us. We'll be happy to discuss with you the wide gamut of growing opportunities. We look forward to hearing from you, and thank you as always for your continued trust in the advice and financial guidance that we provide to you and your family. Warmest regards, Irvin |
