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					T H E INDEPEND EN T
               AD V IS O R
 April 2009                         Quarterly Newsletter of The Fiduciary Group®



The RoaD aheaD
                        Malcolm L. Butler, J.D.                for creating wealth. It is based on a marketplace that
                        President                              works as an efficient mechanism for allocating resources
                                                               among competing uses. Over two centuries ago,
                     In my normal workday, I am                economist Adam Smith used the term “Invisible
                     bombarded by information.                 Hand” to describe the self-regulating nature of the
                     From market data screens to               free marketplace. In The Wealth of Nations, Smith
                     talking heads on CNBC to                  tried to show that in a free market, each participant
                     journalists in the Wall Street            is driven by human nature to pursue the maximiza-
                     Journal, the universal message is         tion of his or her own self interest. In so doing, he/
                     pretty bleak. Businesses con-             she will interact with other market participants to
                     tinue to report weak revenues,            exchange goods and services in the most mutually
unemployment numbers are on the rise, consumers have           beneficial manner because that is a better result than
reduced consumption spending, and the government               producing everything him or herself. Though largely
has passed more measures to assist the financial               an unintended consequence, individuals pursuing
system. Does this mean that capitalism is on the               their own self interest end up benefitting society and
decline? Are we heading into The Great Depression II?          the economy as a whole. (As a footnote, considerable
                                                               societal and legal structure as well as adherence




                                                              “
Too often we get caught up in the immediacy of the             to moral norms were assumed as part of a properly
moment and fail to recognize the bigger picture.               functioning economy in Smith’s writings.)
People tend to think that life plays out in linear fashion,
to believe that whatever is happening today will
continue happening into the future. These days, it
seems that most news has been filtered to accentuate          Too often we get caught up in the
the negative. The negative nature of the economy
and the pessimistic outlook of many prognosticators
                                                              immediacy of the moment and fail
can disrupt our fundamental beliefs. I contend that           to recognize the bigger picture.
         the newsmakers have been overlooking time
                 honored principles that ultimately
                        work to the positive and will          Timeless ideas of Adam Smith did not just die. The
                               set the stage for economic      Invisible Hand has not disappeared. The foundation
                                    recovery.                  of modern economics continues to support our
 CONTENTS
                                                               economy, because it is grounded in fundamental
 THE ROAD AHEAD                          Capitalism is         human nature. The events of the past year have not
 MAlCOlM l. BUTlEr, J.D.
                                           the most            changed human nature. Recent events may have
 THE RIGHT MINDSET                            effective        changed some of the players, restructured some of
 jOEl p. gOODMAN, CFA
                                                environ-       the debts and assets, and revised some of the rules
 CAPITALIZING ON FIXED                            ment         governing our economy. But they have not changed
 INCOME OPPORTUNITIES
 SCOTT B. McGHiE, CpA                                          the fundamental principles that drive, and have
                                                               driven, our economy for hundreds of centuries.
 OWNING YOUR
 INVESTMENT STRATEGY                                           continued to p.2
 Julia l. Butler, J.D., MBA


                         3
                                                                                            CONSERVE. PLAN. GROW. ®
 ABOUT FACE
          PAGE
 C. lEE BUTlEr, llB
                          The RIGhT MINDSeT
                                    Joel P. Goodman, CFA
                                    Chief Investment Officer




                                                            R
                                                                   ead all about it. The world has changed. The
                                                                   market has resembled an Acapulco cliff diver,
                                                                   free falling from DOW 14,000 to DOW 7,000.
continued from p.1                                          Even the recent bear market rally of over 20% off of
                                                            the March 9 bottom felt illusory. The front page of
Humans have a positive bias and so do markets. It           the Wall Street Journal reported gloomily on Friday,
is an essential part of our DNA to create, produce,         March 13 that “the wealth of American families fell
and improve our conditions. There have been many            by $11 trillion (in 2008), a decline in a single year
revolutionary businesses started during economic            that equals the combined annual output of Germany,
downturns thanks to bright people who have a desire         Japan and the U.K.” Peggy Noonan, the famed Rea-
to succeed. Hewlett Packard, Intel and Microsoft            gan speechwriter, proclaimed the following day in the
                                                            Journal, “There’s no pill for this kind of depression.”
were all started during recessions. Businesses,
                                                            She writes, “An aspect of the story given less attention
households, and local governments are all restructuring     than it is due, perhaps because it doesn’t lend itself to
operations to survive the current downturn. As they         statistics, is the psychic woe beneath the economic
reduce expenses, they find ways to be more productive.      woe.” (WSJ, A9, 3/14/09). There is no question that
And as the economy improves, these organizations            people feel differently.
will all be positioned to generate much higher profits.
While all companies take necessary steps to survive,        John Rogers, president and CEO of the CFA institute,
some may fail. Those which fail do so because their         gave a fitting assessment of the new reality in a recent
business model is not sustainable, and they are             update to members. He wrote:
replaced by companies that will succeed. This               During the past year and a half, we have all witnessed
creative destruction serves in an evolutionary manner       the emergence of a new investor landscape. Trust in
to improve the quality of surviving businesses.             financial institutions may have been damaged for a
                                                            generation of investors. Many investors may now be
Looking out over the long term, I have no doubt             preparing to sell on market rallies rather than buy on
that the economy will recover and business condi-           dips as in the past 20 years. Cash is king and debt




                                                           “
tions will improve. The issue that we face today            is bad. Saving may again be perceived as the key to
in these unsettling times is how to handle the near         prosperity; skepticism rather than suspension of disbelief
term. It is essential that investors not lose this long     is the new norm. These major secular changes in
                                                            behavior could be part of our new financial reality.
term focus while enduring short term hardship. It is
vital that all investors establish and follow a plan for
the investment of their savings. This plan must take       ...in every case where a rolling ten-year
into account their personal objectives, tolerance for      period had returns of less than 5% per
risk, and need for income. Their portfolios must
be allocated between cash, bonds, and stocks
                                                           year, the 10 years that followed produced
in a manner appropriate for their short and long           returns averaging about 13% per year.
term needs, and ability to weather volatility. This is
a subject to which we have devoted considerable             We all are adapting and managing in the new reality,
attention in this newsletter, and we urge everyone to       but even as we right-size our lives, we must maintain the
take the time to evaluate the appropriateness of their      right mindset with respect to our investment portfolios.
investment strategy.                                        As we attempt to make good decisions, we have to
                                                            understand the context in which we are making them.
                                                            Certainly, the current investing environment does
By establishing and following an appropriate investment     not inspire confidence. The housing-led credit crisis
plan, investors should be able to successfully              has evolved into a broad based economic recession,
navigate the bumps ahead. The “Invisible Hand”              which is the longest in seven decades. Gross domestic
will ultimately work its magic, the bumps will be           product (GDP) fell 6.3% in the fourth quarter and
paved over, and the road will be much more solid.
a survey of economists projects a 2.5% decline for          business operations. Although I expect that sales
2009. Unemployment has reached 8.5%, and we                 growth rates will slow and margins will compress,
expect it to reach double digits. Visible signs of the      the company will still generate healthy cash flow.
recession are evident. “For sale” and “for lease”           This cash can be used to make acquisitions, strengthen
signs are starting to dominate commercial real estate       its balance sheet or reward shareholders through
fronts.                                                     dividends. During these times, we need to remember
                                                            that the stock market consists of real companies that
In these times, answers and clarity are not easy to         have real intrinsic value; they are not just pieces of
come by. Yet, in our view, it is critical that investors    paper.
“return to the basics” and make investment decisions
that are based on:                                          We continue to focus our equity research on companies
                                                            that:
    Their own staying power as investors
                                                                Have strong competitive positions (market leaders)
    The intrinsic value of their investments
                                                                Generate enough cash flow so that they do not
    The cash flow that their investments are expected
                                                                have to rely on external (debt) capital to fund
     to produce
                                                                operations
  assess Your Staying Power                                     Pay shareholders an attractive dividend
In our view, stock market valuations are not                    Trade at pre-2003 prices and valuation levels
unreasonable, and opportunities to make money at
these values are present. This is not surprising, given       Keep the Cash Flowing
the market’s decline of about 50% from its peak
in October, 2007. According to a recent analysis            A vital component to managing through turbulent
by Davis Advisors, the ten-year period ending this          times is cash flow. In our view, cash flows enhance
coming December will likely prove to be the worst           the stability of portfolios and provide a buffer against
decade ever for stock returns. The market has lost          volatility. When building a portfolio, cash flow targets
3.6% per year for the last nine years versus the 1.7%       can be reached through a combination of interest
annual loss suffered from 1928-1938—to date the             from bonds and cash and dividends from stocks.
largest recorded annual loss on a rolling 10 year basis.    Our fixed income research is focused on generating
Even with a positive return in 2009, this decade will       optimal cash flows by balancing a security’s yield with
surely take the record.                                     the risk of default. Dividend payments are made at a
                                                            company’s discretion, so determining the sustainability
The interesting statistic is that in every case where a     of distributions is critical to achieving anticipated
rolling ten-year period had returns of less than 5%         cash flow. Dividends have historically represented a
per year, the 10 years that followed produced returns       significant portion of an equity security’s total return.
averaging about 13% per year. Even though long              According to Standard and Poor’s research, dividends
term returns may be promising, we cannot predict            have constituted 35% of the monthly total return of
short-term market movements. For this reason, investors     the S&P 500 from 1926 to 2008. For these reasons,
must appreciate their own ability to weather continued      we prioritize achieving cash flow targets in our portfolios
volatility and declines in the stock market. This is        through both dividends and interest.
where adherence to an investment plan which allocates
investments between cash, bonds, and stocks appropri-       We are certain that we can not predict the future.
ate to one’s ability to survive downturns is necessary.     The economy is in the seventeen month of the reces-
                                                            sion. Financial leverage is being withdrawn from
                                                            the system by consumers and businesses, while the
  Look for Value
                                                            government fights deflation by injecting trillions of
Intrinsic value represents what a firm is worth. A          dollars of liquidity through direct investments in fi-
textbook definition is the present value of future cash     nancial institutions, monetary, and fiscal actions. We
flows, discounted by a required rate of return. Intrinsic   expect the economy ultimately will recover, but we
value represents not only the future earnings power         do not know how current events will unfold. Peter
of a business, but also includes tangible and intangible    Bernstein, a well known scholar and risk manager,
assets, and quality of management.                          gives sound advice for navigating these markets: “In
                                                            making decisions under conditions of uncertainty,
As investors, we must attempt to understand the value       the consequences must dominate the probabilities.
of what we are purchasing. I was reading through            We never know the future.” To our mind, having the
a company’s 10K (annual report to shareholder’s)            right mindset and an appropriate investment strategy
recently to review its 2008 financial statements and        is the best way to approach these circumstances.


             PAGE      3 THE              iNDEpENDENT ADViSOr                                       April 2009
                           CaPITaLIZING oN FIXeD
                           INCoMe oPPoRTUNITIeS
                                     Scott B. McGhie, CPA
                                     Investment Manager

                                                             Investment-grade corporate bonds maturing in five
                                                             years are yielding on average 3.5% to 5.0%. While
                                                             the yields are attractive in this environment, there are a


S
     everal clients have asked us about record corporate     number of risk factors we evaluate:
     bond yields, and whether corporate bonds repre-             Record government spending will likely produce
     sent a good investment opportunity. We thought          higher inflation in future years. The challenge in fixed
it would be useful to discuss our process for evaluating     income investing is assessing whether the return will
and investing in fixed income assets, and our outlook        adequately outpace inflation (“real return”). If inflation
for corporate bonds and the fixed income market in           returns to normalized levels of 2.5%, a 1% real return
general. While this article focuses on corporate bonds,      is not worth the default risk for most corporate bonds.
corporate bonds are only one component of our fixed
income portfolio construction. Just as we build                   While conditions in the debt markets have
diversified equity portfolios, we build fixed income         improved recently, many firms with commercial paper
portfolios that balance duration and quality.                programs face refinancing risk, which is the risk that the
                                                             firm will not be able to rollover existing debt with new
We invest in instruments across the high quality fixed       debt, leaving the company at risk of default.
income spectrum, which ranges from risk-free assets               Corporate default rates may rise to levels last
such as U.S. Treasuries and CD’s, to Agency Securities       witnessed in the 1930’s.
which have an implied government backing, Municipals
which have a history of low default rates, and corporate     We address these risks through our preferences when
bonds. Corporate bonds, as the name implies, are             purchasing fixed income assets. We focus on high
issued by corporations and have higher comparable            quality companies, in which the predictability of cash
risk. Relative value and the associated risk/return          flows remains intact despite the current conditions.
tradeoff drive our allocations across the fixed income       We prefer shorter maturities (less than 7 years) because
spectrum.                                                    visibility of a firm’s operations declines significantly
                                                             beyond this point. Shorter maturities also provide
As a starting point, a bond’s price determines its yield-    reinvestment opportunities should inflation increase
to-maturity (“yield”), or the return an investor would       in the coming years, allowing us to generate higher
receive on the bond if it were held until maturity.          real returns. Some firms simply have too much debt.
“Spread” is the difference in yield between any bond         Despite some great businesses that are available in the
and a U.S. Treasury bond having a similar maturity           bond market, too much debt increases default risk.
date (i.e., a corporate bond maturing in 2014 would be       We will be opportunistic on a case-by-case basis. Our
compared against a Treasury bond maturing in 2014).          analysis in these cases may lead us to extend maturities,
The whole story involves understanding the risk/return       or invest in firms where the market has priced in
tradeoff. When selecting corporate bonds, we                 less optimistic outcomes than we believe will occur.
individually assess the risk/return tradeoff for each        The risk/return tradeoff is vigorously evaluated prior to
bond issue. Multiple bonds from multiple issuers are         purchasing these securities.
analyzed before we indentify those that meet our             Although all investors should maintain an appropriate
investment criteria. We focus first on the risk of default   level of cash to meet their immediate needs, we also
by scrutinizing the cash flow drivers for each firm, the     believe that cash should be put to work. An important
firm’s probability of sustaining or growing cash flow        component of generating returns on a consolidated
through maintaining its competitive advantages, and          portfolio is interest on fixed income investments.
the overall prospects of its industry.                       There are significant opportunities in the fixed income
As of the end of the first quarter, investment grade         market, and yields are certainly more attractive than on
(high-grade) corporate bond spreads were around 3%,          cash. Fixed income markets are constantly changing in
versus an average of 0.59% five years ago. In the fixed      this volatile environment, which is why we believe the
income world, a nearly 3% spread on investment grade         work we do in the area of fixed income is so important
corporate bonds represents a multi-decade high. In           for our clients. We consistently challenge ourselves
the below-investment grade space (high-yield or junk         to buy bonds of the right firms, to take advantage of
bonds), spreads are currently above 10%, which is also       market opportunities as they develop, and maintain the
a multi-decade high.                                         risk/return tradeoff as our beacon in providing balanced
                                                             solutions for our clients’ fixed income portfolios.
                                 oWNING YoUR
                                 INVeSTMeNT STRaTeGY
                                      Julia L. Butler, J.D., MBA
                                      Chief Operating & Compliance Officer

                                                                   assets, but that allocation will be influenced by the
                                                                   amount and nature of other assets. Investable assets


I
   n our July 2008 newsletter, we published an                     are often the most easily liquidated to meet cash
   article entitled “An IPS for All Seasons.” Our main             and income needs, but other assets may play a role
   message was that an Investment Policy Statement                 in meeting future needs or managing the downside
(IPS) is the best tool an investor has to make the markets         in times of severe market decline. Also, other assets
serve his or her needs rather than direct his or her               may be inversely correlated with investable assets,
decisions. Without an IPS, investors risk reacting to              serving to reduce the volatility of an investor’s overall
market changes rather than positioning themselves to               portfolio. The size of the portfolio may also influence
manage risk and achieve desired outcomes.                          allocation decisions, as the personal consequences
                                                                   of market downturns may well be more severe in
An IPS is an investor’s personal strategic investment              smaller portfolios.
plan based on an understanding of his or her short-
and long-term needs and objectives, as well as                       Income
tolerance for volatility. The latter factor is particularly        The next step is to generate a realistic picture of an
relevant at present, as nothing tests an investor’s                investor’s income as well as investment income
aversion to risk like a bear market. At the time of                requirements. Here we consider the investor’s annual
our prior article, the S&P 500 had dropped 12.8%                   wages, average investment income from dividends
year-to-date, and in the face of such volatility we                and interest, and other income such as from trusts,
reminded everyone to revisit their IPS to make sure it             incursion into principal, rental income, partnership
corresponded with their current circumstances, long-               income, and so forth.
term goals, and personal risk tolerance. To the extent
our advice had relevance then, its importance has                  One of the key determinants of the relative priority of
probably multiplied considering that the S&P 500                   conservation of principal versus appreciation of capital is
has since declined an additional 36%.                              an investor’s reliance on investment assets to live. In
                                                                   this regard, the nature of an investor’s other income,
A client recently said on a visit, “I can get through              how much, and for how long are significant factors.
anything, as long as I have a plan.” An IPS is an inves-           Also of importance are any notable future sources
tor’s plan. Considering its importance in navigating               of income an investor will receive such as social
volatility and maximizing the likelihood that an                   security or a pension, and when that future income
investor’s assets will be sufficient to meet his or her            will start.
needs at the time he or she needs them, we take this
opportunity to share how we think about constructing               To the extent that an investor is retired and already
(or refining) an investor’s IPS.                                   living on investment assets, either in the form of
                                                                   distributed income or incursion into principal, any
  assets                                                           allocation in equity must be carefully considered
We start with an assessment of an investor’s current               (even in cases where equities have historically paid
assets. We consider not only the investor’s total                  dividends), as the consequences of portfolio depreciation
investable assets (equities, fixed income, and cash),              have an immediate and sometimes irreversible negative
but also their other assets such as real estate, insurance         impact on one’s ability to survive the downturn and
policies, annuities, partnership interests, notes                  meet current living expenses.
receivable, and investment commodities.
                                                                   With the above information, one can make a realistic
The IPS guides allocation decisions for “investable”               assessment of the relative importance of conservation



              PAGE      5 THE              iNDEpENDENT ADViSOr                                             April 2009
 of principal and generation of income (distributed          will likely be able to service the debt out of annual
 dividends and interest) versus growth of capital. It        income. If not, we encourage investors to consider
 also allows the investor to gauge both the consequences     what portion of investment assets might be needed
 of depletion and the requirement for growth of assets       as “collateral” for the debt as a back-up position, so
 over time, which in turn allows a more realistic risk/      that those assets might be allocated appropriately for
 return trade-off to be made.                                such a contingency. An unplanned sale of investment
                                                             assets to pay off debt can negatively impact an inves-
   Liquidity Needs                                           tor’s returns, and the risk of having sufficient assets to
 Most investors think about how much money they              cover identifiable needs can be managed effectively
 will need to have accumulated in order to retire in         through an appropriately conservative allocation
 the lifestyle they seek, or in terms of what their income   strategy.
 requirements from investments are in order to fund
 their current spending. Beyond that, however, it’s            Time horizon
 important to consider one’s liquidity needs over the        Time horizon has two aspects. The first is over what
 next 5-20 years (sums that will need to be available for    period of time (in years) an investor anticipates allowing
 expenses that fall outside of normal living expenses) in    his or her investable assets to accumulate and grow.
 order to gauge one’s risk tolerance relative to those       To the best extent possible, investors should identify
 future amounts. Tolerance can be measured by                both contributions they plan to make to their capital




“
 considering what the consequences would be to an            base over that time, as well as the likelihood of having to
 investor of a downturn in the market at the time he         deplete it for income or liquidity needs. The closer
 or she needed those funds.                                  an investor is to needing or using investment assets,
                                                             the less tolerance an investor likely will have for
                                                             losses (which usually translates to limiting exposure
The more complete an investor is able                        to equities).
to paint a realistic and comprehensive
                                                             The second aspect of time horizon is the time period
picture of his or her needs and risks, the                   over which an investor expects to draw on his or
better able we as advisors are to shape                      her investment assets to cover expenses. Longer life
                                                             expectancies and higher care and maintenance costs
an appropriate investment strategy.                          will influence how long an investor likely will need
                                                             to continue building his or her asset base. Equally
 We encourage investors to identify all of their major       important is the notion of managing expenses, especially
 liquidity needs and the associated time frame, such         when one is living off of investment principal and
 as for private school or college tuition; weddings;         income and is not contributing further to the asset base.
 capital purchases such as homes, cars, and boats;
 and capital projects such as a new business, a major          Unique Circumstances
 renovation, or private investment opportunities.            We ask investors to identify any other unique factors
                                                             which they think might influence their primary
 There may be a different time horizon for different         investment objective such as unique family issues
 portions of an investor’s assets. For example, if an        (for example, a parent or child with particular care
 investor requires hundreds of thousands of dollars          requirements); legacy objectives (for example, having
 to pay for college tuitions, a more aggressive growth       sufficient assets to fund a trust or charitable cause
 strategy may be appropriate 15 years before those           or leave assets to the next generation); future assets
 funds are required, whereas a more conservative             likely to come into play (for example, an inheritance,
 allocation strategy might take its place 5 years out.       the future sale of a business); unique retirement
 The allocation strategy governing those earmarked           objectives; or particular tax considerations such as a
 funds may be quite different from the strategy              low cost basis in concentrated positions. The more
 governing an investor’s retirement assets, which may        complete an investor is able to paint a realistic and
 not be needed for 20+ years.                                comprehensive picture of his or her needs and risks,
                                                             the better able we as advisors are to shape an appro-
   Debt                                                      priate investment strategy.
 We encourage investors to itemize their outstanding
 debt such as a mortgage, loan, or note. Every in-             Risk Tolerance
 vestor should identify over what period of time the         Investment theory and historical capital market return
 debt runs, and realistically assess whether he or she
data suggest that over long periods of time, there is              overriding objective into a strategy statement, with a
a relationship between the level of risk assumed and               corresponding equity allocation range.
the level of return that can be expected in an invest-
ment program. Risk tolerance relates to the degree                 For example, one such primary objective might be
to which an investor is willing and able to accept                 the preservation of capital with income, emphasiz-
volatility (frequency and magnitude of loss) in order              ing generation of current income over growth. The
to meet return goals. We ask investors to identify his             range of equity exposure in this strategy is normally
or her personal tolerance to risk.                                 10-30%. Another primary objective might be the
                                                                   preservation of purchasing power (keeping pace with
An investor with low risk tolerance is someone                     inflation), emphasizing income over growth of capital.
who seeks lower volatility, even if it means lower                 This investment strategy normally allocates 30-50%
long-term returns. An investor with moderate risk                  in equities. Where the overriding objective is the
tolerance can be described as someone who seeks                    preservation of purchasing power (keeping pace
moderate long-term returns, but also prefers moderate              with inflation), emphasizing growth of capital over
valuation swings. An investor with high risk tolerance             income, the range of equity exposure is normally 50-
seeks higher long-term returns but also is willing to              70%. Finally, where the investor’s overriding objective
accept higher volatility.                                          is long-term growth of capital while managing risk
                                                                   over a period of years, the equity allocation is normally
  Putting it all Together                                          70-90%.
The goal of the foregoing exercise is to make an
investor’s needs and objectives transparent in order               We encourage every investor to own his or her IPS.
to come up with the most appropriate investment                    All investors need to take the time to walk through
strategy. By considering the composite of an investor’s            an assessment of the relevant factors to determine
assets, income, debt, liquidity needs, time horizon,               whether he or she is positioned to let the markets
tax situation, unique factors, and personal risk tolerance,        serve his or her interests rather than drive his or her
we can define with an investor the most appropriate                decisions. The relative allocation of assets among
investment strategy, which in turn will govern the                 equity, fixed income, cash, and non-correlating alter-
allocation of portfolio assets to equity, fixed income,            natives is perhaps the biggest factor in determining
cash, and non-correlated alternative assets. Through               both the likelihood that an investor’s objectives will
this process, we are able to synthesize an investor’s              be reached, as well as whether the risk of volatility
                                                                   will be managed appropriately for their circumstances.

2008-09 SILVeR aDDY                                           We are pleased to announce that The Fiduciary
                                                              Group won a 2008-09 Silver Addy award for its client
                                                                                                     ”
                                                              development campaign entitled “Ask Us. The campaign
                                                              appeared throughout 2008 in South Magazine, The
                                                              Skinnie, and Savannah Magazine, among others. The
                                                              ADDY’s is the advertising industry’s largest and most
                                                              representative competition, recognizing and rewarding
                                                              creative excellence in the art of advertising.




              PAGE       7THE              iNDEpENDENT ADViSOr                                            April 2009
                            aBoUT FaCe
                                       C. Lee Butler, LLB
                                       Chairman



                                                                 political system and the largest national economy


I
   t is time to turn lemons into lemonade. When                  in the world, driven by creativity, spirit, and entrepre-
   losses are substantial on the way down, it is important       neurship. The U.S. economy is constantly evolving
   to realize that at some point there is just as much           and producing goods and services that meet the
money to be made on the way up. In prior market                  changing needs of the global economy. One well
retreats there was always a time when devaluation                known example is the emergence of Internet search
bottomed out and the long road back up was probable              into our daily lives. It’s hard to imagine getting
and in fact did occur. The question is what horses               through the day without searching for something on




“
are right to mount for the climb. Some past leaders              the Internet. Google was conceived in a dorm room
will never recover. The dynamics of the market are               in Stanford University just ten years ago, and now is
in play.                                                         one of the most widely used verbs in our lexicon and
                                                                 has a current value of $116 billion.

Selection of the probable winners                                The bottom may be longer and lower, but at some
in a resuscitated economy demands                                point the winners will emerge and the riders will
                                                                 profit. I have as much faith as I ever have had in the
great attention among investment                                 American economy. As that great Civil War cavalry
                                                                 general Phil Sheridan in his historic ride from
managers and will surely test their                              Winchester to Cedar Creek yelled to his retreating
expertise like nothing else in a long                            troops, “About Face, boys. We are going back.”

time.
Selection of the probable winners in a resuscitated
economy demands great attention among investment                   NOTE FROM THE EDITOR:
managers and will surely test their expertise like
nothing else in a long time. This ought not to be a
time of despair but one of opportunity to recapture                We hope you have enjoyed this edition of The Fi-
the greatness of the American economy. We have                     duciary Group newsletter. We are interested to hear
every right to assume that our Government recog-                   your thoughts and suggestions. Please feel free to
nizes that the strength and direction of the economy               send me your feedback at julia@tfginvest.com. If you
depends on our entrepreneurs who lead the way in                   have family or friends who you think might enjoy
their small and medium-sized businesses.                           our newsletter, please e-mail me their name and ad-
                                                                   dress. Thanks, and we look forward to enhancing our
The U.S. annual economic output was estimated at                   service to you with each edition.
$14.2 trillion in 2008, which translates to almost
$50,000 per person. The U.S. is the most stable                    -Julia L. Butler, Editor
                                                                   Chief Operating & Compliance Officer




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                                                                 Savannah, Georgia 31406
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                                                                 Savannah, Georgia • 31416
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language:English
pages:8