In the first nine months of 2012, equity markets advanced, declined and advanced again in most parts of the world to finish with an overall gain of 7% as measured by the Global Dow.
The equity markets in Europe, Asia, North and South America all finished mixed with the United States Dow Jones Industrial Average up +10% The slow patch we went through in the second quarter of 2012 accelerated with the back-to-school shopping season.
As I write this commentary, oil prices at the pump have gone down in our area from $3.80 per gallon to $3.50 per gallon for unleaded. This drop at the pump has helped consumer optimism and the markets overall.
Lastly, by the time we write the next quarterly commentary, the presidential election will be decided, and that will be another positive for the markets, regardless of the outcome, because it reduces another uncertainty.
Our investment portfolios finished up 9.4% through the first three quarters of 2012. Looking forward, what we need to see is positive momentum in third quarter earnings reports for our investments.
Our investment approach is to buy companies with consistent earning power, high return-on-equity while employing little or no long-term debt and to purchase at reasonable prices with a high margin of safety.
We have a system that filters thousands of stocks on a weekly basis using the Sparrow 75-point checklist that screens the highest quality companies, which are then reviewed and considered for purchase in your portfolio.
As always, my family and I have almost all of our equity investments in the stocks that are in your portfolios. This does not of course guarantee a return, but it does focus my attention on things that matter to you as a shareholder.
We currently invest for clients that have IRA’s, 401(k)’s, Trusts and taxable accounts. We have developed a proprietary Sparrow 75-point checklist over the past 20 years which assists us greatly in our search to identify winning equity investments.
Disclosure: Performance discussed is net of advisory fees. Certain of the information contained in this presentation is based upon forward-looking statements, information and opinions, including descriptions of anticipated market changes and expectations of future activity. Covestor believes that such statements, information, and opinions are based upon reasonable estimates and assumptions. However, forward-looking statements, information and opinions are inherently uncertain and actual events or results may differ materially from those reflected in the forward-looking statements. Therefore, undue reliance should not be placed on such forward-looking statements, information and opinions.
