Rebalancing Memo. September 28, 2011
In the next couple of days clients will receive “Transaction Confirmations” from TD Ameritrade, which will indicate sales and purchases occurring in the account as a result of rebalancing activity this week.
Due to the high market volatility for the last few months, portfolios had drifted from their original asset allocation established at the time the account was opened. As part of our commitment to our clients every account is reviewed each quarter and may be rebalanced when deposits, withdrawals and market changes dictate. If you would like to review the available allocations of all CFS portfolios please go to our web site www.compasstx.com.
Rebalancing is a key component of a portfolio structure and contributes discipline, provides accountability, and measures expected returns and risk. History has shown over time no asset class remains at the top of the performance chart for an extended period but they move up and down and therefore it is impossible to predict in advance the winners and losers. As you know forecasting is not part of our philosophy.
The Harvard Crimson reported on September 22, 2011 the Harvard Endowment fund had grown 21.4 % year ending June 30, 2011 and now totaled $32 Billion and had exceeded all established benchmarks set for the year. This was after a 27.3% decline for the previous calendar. I am pleased to note all CFS portfolios exceeded their results, net of all cost and fees for the same calendar period. The article did not indicate their asset allocation and if expenses were included, therefore the information does have some limitation and leaves unanswered questions for a true comparison. The global market unrest continues to drive the daily market volatility and emotions but for the long-term investor it must be ignored and considered daily noise.
As always your questions and comments are welcome.
Compass Financial Strategies Team