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Comments Regarding CRA 2015 Stock Investments
submitted by Richard Briggs

 I am still of the opinion, that over the long term, a 4 percent return is a reasonable assumption for a Stock Market rate of return.  In an account such as ours, we can probably withdraw five to six percent a year, every year, and never run out of money given the mix of investments, the account manager AND, the oversight team we have in place.

The Stock Market was an incredibly difficult place to earn money last year.  We have a lot of volatility in the markets.  This coupled with the fact that interest rates are beginning to move higher create both risk and uncertainty.  Again this year I would like to quote the Warren Buffet comment in a letter to his stock holders.  He said, “You never know who is swimming naked until the tide goes out.  He was referring to the fact that in a volatile, or declining market it is really easy to see how much risk you have in your investments especially; when the market goes against you.  I would also like to add, when you see your holdings decline in value, by definition, there a lot of risk in that portfolio.

In the investment accounts I manage for members of my family, Sterling and I still have similar philosophies.  We both use mix of Stocks and Bonds.  I use dividend paying stocks, and as a matter of fact, we hold some of the same issues in our respective accounts.  Sterling holds some individual Bonds, and I mostly use Exchange Traded Bond Funds to reduce the risk of the individual Bonds.  Another minor difference between us is the fact that Sterling will hold individual Preferred Stock Issues and I like to hold Preferred Bond Funds, again, to diversify and reduce risk.

In my humble opinion the CRA could improve its position by:

  1. Switching out of some low yielding stocks into higher yielding similarly safe issues.
  2. Continuing to manage our market sector diversification.  We also need to be invested in different sectors to avoid being concentrated to heavily in any one sector.  For example, now (January 2016) would not be a good time to be heavily invested in Energy and Petroleum stocks.
  3. I like to look at a 1 or 2 year chart to see that the chart is trending upward as part of my decision making process.  I also like to talk to my broker.  Once the decision to buy is made I find the 5 day chart helpful.

In conclusion, I think the interests of the CRA are still being well served by the Morgan Stanley Company and our advisor Mr. Delatri.  Sterling puts a lot of time and thought into the portfolio and he has the professional resources of a major brokerage house at his disposal to back him.  I lack his depth of his knowledge, his access to investment specialists through his experts, his unique ability to explain things in a way I understand, and last but certainly not least as I stated in my report last year, a very pleasantly put-forth gift of gab.  Bottom line, I still think our stock account in good hands with Sterling and the Morgan Stanley Company.