The first quarter of 1998 provided outstanding investment performance. Equities ended the quarter at or near record highs. Market volatility, mentioned in our January 14th letter, was evident in both domestic and international equity markets.
The yield on the 30-year US Treasury bond ended the quarter near the December 31st level, its lower level n more than four years. Bond yields most likely will not decline much further unless inflationary pressures continue to ease. Current domestic inflation statistics continue to be benign. The lack of inflation remains a key long-term positive for both the bond and stock markets.
It is prudent to remind you to maintain reasonable expectations. Investment returns over short periods – even periods of several years – are notoriously unpredictable. Although no one can reliably predict the timing of bear markets (or bull markets, for that matter), we will not lose sight of the extent to which both bond and stock prices can decline.
If you desire Morningstar reports, or the most recent copy of out Form ADV, Part II, please call us. If your investment objective or personal financial situation has changed, it is important to notify us so we can reevaluate your portfolio.
Enclosed, please find your first quarter 1998, 12-month and 36-month Portfolio Performance Summaries (where applicable), Portfolio Holdings statement as of March 31st and quarterly Account Management Fee Statement.
Best regards,
President
Vice President