July 2008 marked the beginning of our 40th year in business.  Over the years we have extended our service area from Southern Indiana to over 25 states.  On behalf of our family, our staff, and our representatives, please accept our sincere gratitude for your amazing display of trust through your loyalty and quality referrals.  We appreciate each of you and look forward to many more years of the impeccable service we strive for daily.  We are currently planning a customer appreciation event for August…….details to follow.

 Respectfully,

 Brad Holland

Buy High, Sell Low! It violates the most fundamental element of investing, yet thousands of investors practice it every day. As soon as the market or sector they are investing in loses ground they sell and go looking for the hot market. Eventually a new fund or sector with some strong recent gains is chosen to invest in and the investor is again confident that he or she is back on the fast track to riches. Then it happens again, and again, and again. All the instruments they purchase have proven track records, yet their overall portfolio reflects a below-average return. 

Or maybe the investor hopes to stay ahead of the game and pulls out of equities because the last two years have had significant gains and we are “due” for an adjustment. Then the next two years have even higher growth as the investor’s money sits near idle in fixed accounts that barely keep up with inflation. So the investor decides he made a mistake and re-enters the market. The market becomes very volatile and the investor rethinks his decision. Now he goes back to fixed income securities with less money than he had before, and buys the same thing he held before for a higher price than he just sold it for. This may sound like a bumbling investor, but study after study shows that he is probably average; an investor who makes emotional decisions, tries to time the market, or loses sight of his long-term goals. In other words an investor who has forgotten the “Three D’s” of investing: 

· Diversify: Don’t put all your eggs in one basket or your money in one sector. As the economy expands and slows money has a tendency to flow back and forth between equities and fixed instruments. But inside these two markets exists a selection of sectors that also expand and slow with differing rates. This makes the proposition of timing the market even more preposterous since you have to time the smaller sectors against the broader sectors. The solution? Develop a portfolio that invests across a selection of sectors that match your overall accumulation goals with respect to your risk tolerance and time line. ·Dollar Cost Average: Dollar cost averaging is the systematic purchase of investment instruments over time. By buying an equal dollar amount each period, you should end up with a cost basis that is close to the average over that period. This is especially valuable in volatile markets where dramatic swings are experienced and diving in on the wrong day could be a significantly sobering event. However, with any investment program, there are no assurances of success. No investment program can guarantee a profit or protect against a loss in a declining market.  And since dollar cost averaging involves continuous investment in securities, you should consider your ability to continue purchases through periods of low prices. 

· Discipline: This is the single most important factor in avoiding the before mentioned traps. Although the market moves based on the economy, it can also swing wildly based on psychological reasons such as political turmoil, rumors on interest rate changes, or other world events. If the fundamentals of the economy still match your overall portfolio objectives then you stay the course. This is where the financial professional often becomes the deciding factor between the investor’s success or failure to reach his or her goals. Buying high and selling low is especially prevalent when the market takes a big loss. It is then that I provide the most value to my clients. When a nervous client calls I do two things. First, we go over the client’s portfolio objectives and make sure the composition still matches the fundamentals of the economy. Then, if it does, I remind my client thatonce the market goes down it’s time to buy—not sell.

If you’re like most investors, you find today’s investment climate more complex than it was even a few years ago. Let’s face it, with more than 8,000 mutual funds to choose from, and a myriad of stocks, bonds, annuities and other investment products available, it’s difficult to know where to begin. In addition, developments around the world have created new markets for goods and services, which in turn have generated exciting new investment opportunities.

Using the services of an objective financial professional may be the key to sorting out all of these issues. A financial professional can assist you in building an investment strategy based on your personal goals and tolerance for risk.

Compensating The Financial Professional
An important issue you need to address is how the financial professional is to be compensated for his or her services. Financial professionals may be compensated in a number of ways. These include through commissions derived from the sale of individual financial products, by a set fee for service, or a fee assessed annually based on a percentage of the value of your account. Financial professionals charging a fee based on the value of your account are able to provide these services through programs known as managed money or fee-based advisory programs, which are becoming very popular with today’s investors.

Fee-based advisory programs allow a financial professional to offer clients professional portfolio management using stocks, bonds, mutual funds, variable annuities or some combination thereof. The portfolios may be managed by the financial professional and the client using a pre-developed platform, or may be given to a third-party firm to manage. One of the many advantages of fee-based advisory programs is that they allow you to fully utilize the concept of asset allocation. By definition, asset allocation is the apportioning of investable funds among a variety of asset classes with each class reacting differently to similar economic events. The strategy’s objective is to offer more opportunities for potential growth in some portion of the portfolio in changing economic environments.

Some additional benefits may be consolidated statements, greater objectivity by your advisor and a higher level of quality service.

You might find that the fee-based approach to managing your personal investment portfolio offers you a more palatable alternative to the traditional commission-based method. If fee-based advisory programs sound interesting to you, please don’t hesitate to discuss this concept with your financial professional.