Portfolio Update - 12/31/08
By proceeding, I acknowledge that I have read and understood the Disclaimer, Performance Reporting Disclosure and Copyright Statements . Dear clients, We finished off the year strong yet I was unable to get your accounts into the black for 2008. Our losses were far less than the great majority of investors, yet I am disappointed in having experienced any losses at all. Here is how my performance has stacked up compared to the averages:
| PORTFOLIO | Q4 | 2008 | 2 Yr Trailing1 | 3 Yr Trailing1 |
| MAC’s Core Portfolio | 7.6% | (8.0%) | 3.5% | 11.5% |
| MAC’s Focus Portfolio | 7.5% | (7.3%) | 2.9% | N/A |
| MAC’s Ave. Margin Acct2 | 9.8% | 39.6% | 65.2% | N/A |
| S&P 500 (VFINX) | (22.6%) | (37.6%) | (34.2%) | (23.9%) |
| NASDAQ 100 (QQQQ) | (23.5%) | (41.7%) | (30.6%) | (25.7%) |
| Benchmark | (13.3%) | (20.0%) | (13.1%) | (6.2%) |
- Trailing 2 and 3 year figures are cumulative returns – not annualized. Therefore, an investor would have experienced a total return of 11.5% in my Core Portfolio since the close of business on 12/30/05 versus a loss of 23.9% invested in VFINX. For my benchmark, which is the Scott Burn’s Couch Potato Portfolio, I rebalanced the account to 50% VTSMX and 50% VIPSX at the end of each year.
- Average Margin Account performance is simply an average of all of MAC’s margin accounts under discretionary management. There is significant disparity in the performance in these accounts as they are invested in one of MAC’s three strategies (Core, Focus or Income). For example, in 2008, the difference between the best and worst account performance was 37.2%. (Best performer returned 60.4% and lowest returned 23.2%) The purpose of exhibiting this information is to show the adviser’s ability to short the market which it does not do in its primary portfolios. Shorting securities is risky and can result in losses in excess of your original investment.
Despite the losses this year in our primary strategies, we are blessed to have experienced gains over the past 2 – 3 years. Few investors can claim this feat. I am hopeful for the future based on my performance in the past quarter since I implemented my new trading measures. I will provide an in-depth explanation in my annual report. I hope to mail it to you by Wednesday, January 7th. All the best, Matt
