Dear valued client:
If you watch the press, it is perfectly understandable that you could be concerned about the markets, the strength of our firm, and the well-being of our industry. As your advisor, I want to help you make sense of all that is going on.
Let me start by saying that I am reassured about our system as I watch events unfold. Some of the largest financial institutions (Fannie Mae, Freddie Mac, Merrill Lynch, Lehman Brothers, AIG, and more) are in receivership, have agreed to be acquired by other firms, or are contemplating bankruptcy. Bad stuff. Even so, our markets and the economy continue to function without interruption.
The demise of companies that were overextended in subprime mortgages, auction rate securities, and other excesses of the financial industry will mean a decline in the value of most investor’s portfolios for now. To address the changing market conditions we may employ some minor short term adjustments, but we are maintaining our long term perspective. The current events of the marketplace are not unprecedented, and we will emerge from them as we have emerged from the ones in the past.
Beyond events of the markets, let me also reassure you about the safety of your investments as they relate to our firm, and our broker dealer, Ensemble Financial Services. Colgan Capital is a thriving practice and has the good fortune of teaming up with a strong broker dealer. Ensemble Financial Services is a wholly owned subsidiary of Tompkins Financial. Tompkins affiliates did not participate in “subprime” lending and Ensemble had no involvement in auction-rate security underwriting or sales. In fact, based on its superior performance, Tompkins was once again recognized for its 35-year track record of earnings in the Staton Institute’s® 2009 Edition of America’s Finest Companies® both on its Earnings All Star® list and as one of America’s Smartest Companies®. Furthermore, in July Tompkins reported a 12.3% increase in second quarter earnings per share.
All that being said, it is also important that you understand that each of your accounts is covered by insurance against the failure of either Ensemble or the firm that holds many of your securities, Fidelity Investments. Any bank products you may own through us are also covered by FDIC insurance. In summary, the firms we are affiliated with are solid and have many protections against disaster.
While your portfolio’s value will fluctuate with the markets, our philosophy of diversification is designed to help reduce the risks inherent in any single investment or type of investment. Though the times may be turbulent, and your portfolio’s value may decline in the near term, your strategy is performing as it was designed.
If you have specific or ongoing concerns, please call me or our portfolio manager Susan (Susie) Schneider. I will be back in touch as things continue to develop or as it gets time for your next review. Have a wonderful autumn season.
Sincerely,
Mark Colgan, CFP®
PERSONAL UPDATE
Christopher turned three last month and Emily is on her way to being potty trained - yahoo! Both are doing very well. Below is a picture of us at the top of Bald Mountain in the Adirondacks. Christopher hiked to the summit on his own, litterally!
