from MITCH FISHER, PRESIDENT
“Her voice is full of money.” Gatsby said about Daisy in F. Scott Fitzgerald’s classic novel, the “Great Gatsby”. In the 1960’s, this book was required reading for students in middle school (we called it “junior high” back then). In the same year that Beatle’s music was coming out of every radio, I was introduced to the great opera diva Joan Sutherland. Dubbed the “voice of the century” by Luciano Pavarotti, her trills and staccatos were beyond compare. If it hadn’t been for an enthusiastic chorus teacher who took our music class to see Lucia de Lammermoor and to meet Dame Sutherland back stage, I never would have heard her astonishing arias of power and beauty. Your investments for the last 8 weeks should have reflected a power and beauty of their own.
The DOW advanced for the 8th straight week and closed at 11,871 on Friday. The American economy is strengthening as manufacturing and home sales rise and unemployment declines. The Conference Board’s leading economic index rose 1% in December. According to Morningstar, the major equity fund categories with the highest one year returns for the past year have been Technology +26.5%, Real Estate +27.6% and Small Cap growth +27.4%. The average US Stock fund increased 15.9% compared to foreign funds +11.6%. China grew by 10.3% in 2010, overtaking Japan as the world’s second-largest economy after the United States.
Who are the world’s largest money managers? Fidelity Investments, the company behind your accounts through National Financial Services, is #4 with $1.7 trillion of total assets. Further down the list are names you may recognize such as Vanguard #5, J.P. Morgan #9, Goldman Sachs #14, and Franklin-Templeton #24. Blackrock is last year’s leader with $3.3 trillion, followed by State Street Global and Allianz Group. You can probably guess the biggest endowments: Harvard University with $27.6 billion, Yale with $16.7 billion, followed by Princeton $14.4 billion and Stanford $13.8 billion. The most charitable foundations in America are Bill & Melinda Gates $33.9 billion, Ford Foundation $10.3 billion, and J. Paul Getty Trust $9.3 billion.
You should be receiving your important tax report 1099 from National Financial in the next few weeks. The data will contain your dividends and capital gains for 2010. If you have an “unknown” cost-basis on your form, please consult your personal records or confirms. If you cannot find your purchase information, we can work with your accountant to establish your cost basis. For your IRA accounts, you have until April 15th to make a contribution in order for it to count in 2010.
On a personal note: Our condolences to Helen and the Wilson family for losing Dale this month, a gentleman for 94 years. Congratulations to Ed Woore for making it to 90 and continuing to send me emails about high dividend stock companies to research and to buy. On February 5th, we will be dining at the Five Crowns again in Corona Del Mar to celebrate the birthdays of our clients born in October, November and December.
Pacific Sun Financial turned in a very good report card in 2010. Our revenue was higher by 14.5% from the previous year and our assets under management increased by 9.2%. Our account retention rate was 98.3%. In the years ahead for financial advisors, some industry forecasters are anticipating what I would call a “Home Depot Effect”. The personal financial consultant or wealth manager may be swallowed up by a worldwide bank, just as many local hardware stores have given way to the giant home and garden warehouse. How do we keep our customers happy in the future? In a word: Service. As a client, you want to be assured that we will be responsive to you, perform well within your level of risk, and always put your interests first. We hope that beating the S&P 500 is only one of the reasons why clients stay with us. In this age of voicemail and call centers, it must feel good to hear a greeting on the phone from a live person nearby. Sometimes I feel like a dentist when it comes to financial checkups, and other times I’m more of a travel agent…but we insist on reviews and being proactive. Our range of services includes more than portfolio diversification. We have helped clients find ways to pay off their mortgage, retire early, save taxes on the sale of a business, arrange assisted living care, or sort out beneficiary distributions in a living trust. At life’s crucial decision points, we want to be of service to you.
Projects and Outlook for 2011: With one of the worst financial decades hopefully behind us, we must look for new ways and opportunities to improve our service and performance. Knowledge is power…and we intend to increase our access to the world’s most extensive financial information. We will upgrade our technology and keep learning. As Coach Wooden would say, “If I am through learning, I am through.” We will continue our quarterly birthday luncheons since they have been so popular and have provided us with a great way to meet new people. (I’m not sure if we can improve upon the prime rib at Five Crowns.) There are new tax laws that need to be studied and addressed with clients, especially the $5M exemption in estate planning. If you are on Skype, please tell us your address so we can perhaps see each other during our teleconference reviews. Our website remodel is nearly finished and we hope to unveil the beauty of it this month. In my opinion, the investment sectors that should perform well in 2011 will be biotechnology, banking, the Internet, residential real estate, and alternative energy. There is nearly $2 trillion of cash in America “idling” at roughly 1% that will ultimately be invested in the markets.
Who will win Super Bowl 45, the Steelers or the Packers? I don’t know…but it’s a good bet that your stocks, growth funds, and real estate will be higher in value this time next year.
Today’s the day.
Pacific Sun Financial Corp; 95 Argonaut, Suite 105, Aliso Viejo, CA. 92656 Telephone: (949) 716-8646 Fax: (949) 716-8645 Website: www.pacsunfinancial.com
 MFS Management 1-21-11  Pensions & Investments 12-27-10