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Independent, impartial, objective, and professional financial advice Hey folks, Hope everyone is off to a safe and happy New Year. I have been doing a lot of studying over the past few months, getting ready for the CFP (Certified Financial Planner) exam in March. The exam covers an enormous amount of material (think investments, tax, retirement, estate, and insurance planning all wrapped up into one exam) and is considered one of the most rigorous designations in the planning profession. Between prepping for the CFP exam and my normal investment-related reading, there are times when I feel a wee bit wall-eyed. All for a good cause, though-so no regrets!On the subject of investment-related reading, I decided to compile a list of the publications that I read each day/week/month. My reason for doing this is to offer to share some of these materials with other interested readers before they hit the "circular file." Contact me if you would like me to save something for you. The Wall Street Journal I also have gathered quite a few investment- and life planning-related books over the last few years that I'd be happy to loan out. At some point I'll assemble an inventory, but in the meantime call or e-mail me for details. In this issue: 1. Market Metrics 1. Market Metrics--
Chart courtesy of and with thanks to Fixed Income Securities and Stone and McCarthy 2. Reader Questions-- Dear Will, can you please explain how the investing markets will react to the impending war with Iraq? Signed, James Thanks for the question, James. If there's one thing markets hate, it's uncertainty. The uncertainty preceding military action causes a general flight to quality (ie gold, Treasury bills, some commodities). Buyers in the equity markets adapt a cautious posture, causing the stock markets to go sideways to down. Historically, though,as soon as the first bomb drops, gold, T-bills and oil experience a major drop in price, and a fairly robust stock market rally ensues. Whether that pattern will repeat with regards to the US' current situation with Iraq is anyone's guess, however, as a myriad of factors-length of conflict, collateral damage, condition of the oil fields, associated terrorism-come into play. That's the historical perspective, though. Note: E-mail or call me with your investing questions and I'll do my best to answer them in upcoming newsletters. 3. Model Portfolio Update--As long-time readers know, I have assembled two model portfolios-Dividend Value and 21st Century Growth. Both are concentrated stock portfolios that have been designed to attempt to outperform the S&P 500, and to do so with low expenses and low portfolio turnover. These model portfolios may ultimately morph into Dare Capital Management investment offerings, (ie mutual funds or separate investment accounts) but in the meantime they are designed to allow us to see how different investment themes are being received in the marketplace. In early 2003 a third portfolio was initiated. The Challenge Portfolio came about in response to a challenge from a friend who's a proponent of passive investing. The Challenge Portfolio has the specific goal of beating the S&P 500's performance over a one-year period, with low expenses and low portfolio turnover. The portfolio is being monitored by my passive investing friend also, and results will be reported in this newsletter over the coming months. Here's the results: Since inception in August 2002, the 21st Century Growth portfolio has returned -2.91% including dividends. That is ahead of the S&P 500, which is down 8% over the period. The top five holdings are software maker BEA Systems (BEAS), online brokerage and Dare Capital custodian Ameritrade (AMTD), food distributor Sysco Foods (SYY), regional lender First Virginia Bank (FVB), (set to be acquired by Branch Bank and Trust (BBT)), and conglomerate Tyco (TYC). There have been no buys or sells in the portfolio over the reporting period. The Challenge portfolio has produced a total return of -6.64% including purchase costs and dividends since inception, beating the S&P 500, which is down 8% over the period. The top five holdings are First Virginia Bank (FVB), boating retailer West Marine (WMAR), drug maker Pfizer (PFE), media conglomerate Liberty Media (L), and electric utility Southern Company (SO). There have been no buys or sells in the portfolio over the reporting period. Dividend Value has returned -9.41% including dividends since August, lagging the S&P 500 by 1.5%. The top five holdings for this reporting period lean towards banks and financial institutions, including regional lender First Virginia Bank (FVB), Sysco Foods (SYY), financial services giants Citigroup (C) and Bank of America (BAC), and municipal bond broker John Nuveen Co. (JNC). There have been no buys or sells in the portfolio over the reporting period. 4. Link to Tax Changes for 2002-- The Motley Fool recently published a handy guide to the tax law changes affecting preparation of 2002 tax forms. The link to the article is http://www.fool.com/taxes/2003/taxes030117.htm 5. Charts:
Good investing, Will Woodard is president of Dare Capital Management and Advisory, an independent Registered Investment Advisor and fee-only financial planning firm based in Kill Devil Hills. Will's firm specializes in independent, impartial, objective, and professional financial advice. He, his firm, or his clients may own the investments mentioned herein. The fine print: This newsletter can be reprinted or forwarded--however, it is requested that reprints of any material in this newsletter include credit to Dare Capital Management and Advisory (252)480-0156 and an email link to will@darecapital.com. Thanks for spreading the word! All of the foregoing is commentary for informational purposes only. All statements and expressions are the opinion of Will W. Woodard, III and Dare Capital Management and Advisory, and are not meant to be a solicitation or recommendation to buy, sell, or hold securities. Mr. Woodard, his firm, or his clients may own the investments discussed in this newsletter. Past performance is no guarantee of future returns. The information presented herein and the company's web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future results may vary for many reasons. Copyright 2003 Dare Capital Management and Advisory-all rights reserved. |
