April 2016

November 15, 2019

Dear Client,

It’s difficult to remember a time when there has been more bad news…4 terrorist attacks in 4 months; political divisiveness with continued gridlock in Congress; energy prices crashing; China’s economy sliding; the immigration crisis in Europe and the ongoing conflicts in the

Middle East and North Africa. We can’t ignore all this negativity but we can use it to focus on the investment choices we have that have proven to be the wisest over time.

To illustrate these choices, you will find four additional pages included with this letter. The first one shows stock market downturns and recoveries from 1926-2015. Every downturn, no matter how severe, was followed by a recovery.

Another page shows stocks, bonds, bills and inflation over the same period of time. Historically, you can see that just holding a diversified portfolio of stocks and bonds has led to positive inflation beating returns, over the long term. Investing in the stock market at times like this can feel like an emotional roller coaster ride. However, despite its’ ups and downs, stocks have returned around 10% for the last 90 years. Looking back, the wisest move you could have made was to stay invested, through the good times and the bad.

The next 2 pages enclosed show the performance of Vanguard stock and bond funds during the last recovery from recession. The growth since 2/28/09 led to complete recovery and new highs. Stocks are down over the last 12 months and on average, up around 10% for the last 3 years. Our economy has grown, on average, about 3.5% a year for the last 50 years and 2.5% a year for the last 7 years. During the last 7 years, corporate earnings have risen 282%. The earnings represent the real value of stocks.

Federal Reserve officials recently held interest rates steady and suggested that they would raise rates only twice more this year. Low rates usually help corporate earnings. Jobless claims remained below 300,000 for the 54th week in a row. That’s the longest streak since 1973. American home-owners wealth has recovered $7trillion since the last recession and is poised to reach a new record as early as the second quarter of this year. Home ownership is much wider than stock ownership and both help fuel consumer confidence and spending.

Future market downturns are inevitable but the wisest choice in the past has been to hold the course.

Best Wishes
The Investment Committee