July 11, 2000
The second quarter started out with all the ingredience of being a volatile one. President Clinton and Prim eMinister Blair’s announcement of sharing the discoveries of the human genome project coupled with Abbey Cohen and other analyst’s comments had set the stage. With oil prices threatening to climb, two Fed meetings yet to come and a red-hot domestic economy, signs of volatility were everywhere. By May 23rd the NASDAQ had lost almost 39% of its value from its high in March. The Dow Industrials and the S&P 500 also lost some of their steam falling 4.3% and 2.9%, respectively, during the quarter.
Indeed, we have been through one of the most volatile financial periods since the Asian financial crisis in 1998. Both “old” and “new” economy stocks were affected – so much so, that the three major indexes, the Dow Industrials, the S&P 500 and the NASDAQ have yet to turn positive for the year.
Fortunately, towards the end of May we found a “white knight” in the form of Mr. Alan Greenspan whose policies have started to facilitate the “soft landing” the markets dearly needed. To the markets’ relief, on June 20th Mr. Greenspan took the oath of office for another term as head of the Federal Reserve.
Indeed, there was news that impacted the markets positively. China took one step closer to gaining membership in the WTO with the endorsement by the U.S. Congress of permanent most favored nation status. Towards the end of the quarter OPEC agreed to increase oil exports to ease prices that had skyrocketed during the first few weeks of June. The quarter was capped on June 26 with the announcement of the completion of the first genetic blueprint of the human genome.
We expect recent volatility to continue through the third quarter as Greenspan & Co. engineer the economic “soft landing.” Though the returns of the past several years most likely will not be duplicated this year, rest assured we are looking out for your best interests and will try to achieve the highest return possible for the level of risk assumed in each portfolio.
If you desire Morningstar reports, or the most recent copy of our Form ADV, Part II, please call. If your investment objective or personal financial situation has changed, it is important to notify us so we can reevaluate your portfolio. Enclosed, you will find your Portfolio Performance Summaries, Portfolio Holdings statement as of June 30, and our quarterly Account Management Fee Statement.
Sincerely,
President
Vice-President