Spectrum Advisors Newsletter October 2009

Spring ahead . . . Fall back??

That is the question that is being asked more and more these days.

Since the March low, we have seen a rally of over 50% on the S&P 500 index! Virtually all stock and bond market asset classes are higher for the year. One notable exception is the US Intermediate T-bill, which is modestly negative for the year. Safety has its price!

While the recent rally has allowed those of us who were invested to recover a significant portion of last year's losses, it would be unwise for us to think that the pace of the recent surge in the markets would continue without pause. Many market seers have been looking for the market to give back a portion of its recent gains, which will then set the stage for the next leg higher. September has historically proved to be a time of correction in the markets, and we believe this year may prove to be the best September for the market in over 10 years! We do continue to believe that the market will pause at some point in the near future- if only for a brief time. This will not be a cause for alarm!

In the event that the market decline of late 2008 and early 2009 caused a shift in your risk tolerance and you have not yet taken action to adjust for the difference, now would be an opportune time to consider a re-allocation. Let us know if you would like to update your risk assessment.

We have been working with many of you in the past year to reposition a portion of your accounts into market alternative and/ or principal-protected products. These actions have proven wise, as they have allowed for increased diversification of your assets. They also allowed you to remain invested, and afforded you with the peace of mind provided by a principal protected hedge while simultaneously allowing you to capture the gains that have taken place as the market has recovered.

We continue to embrace a "broader view of diversification"- and we have adopted a 'four-quadrant' philosophy in building and managing your wealth using differentiated products and investment styles. Let us know if you would like to hear more about this and we can offer further details.

In closing, we wish to thank you again for the trust that you place in us as we seek to serve your best interests. We will remain diligent in bringing new concepts and ideas to your attention as we uncover them.

Don Goerner, CFP® CSA      Mike Reppert, CFP®, CSA
Managing Partner                 Sr. Partner

Securities offered through Purshe Kaplan Sterling Investments, Member FINRA/ SIPC Headquartered at 18 Corporate Woods Blvd., Albany NY 12211