Financial Events

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The Virtus View is a weekly to bi-weekly e-mail publication that Brian authors in order to keep you updated on the current market situation.

VIRTUS VIEW 6.20.09 6/20/2009

THE VIRTUS VIEW

This communication is intended to add value to your life by helping you separate the real news from the white noise, understand the critical economic events that you read about every day and outlining alternative investments which might be advantageous to you in these times. We send this bi-weekly e-mail to both clients as well as individuals we hope become future clients. Thus, to my valued clients, since we use many alternative investments in your portfolio currently, some of the e-mails might discuss assets that you already understand. It never hurts to review your knowledge of those investments.

First I wanted to announce that I have agreed to host a radio show on CNN 1190 Radio On Saturday afternoons from 4:00 pm to 5:00 pm. The show is titled “Your Money, Your Retirement. I am very excited about this opportunity to continue our mission to educate investors on investment choices they have and how institutional strategies may add value to their life. I hope you can tune in and participate in my show.

I also wanted to give an update on the market and a possible investment that may help manage the risk in your portfolio. As I predicted in the last Virtus View, the talk on Wall Street would turn from “it isn’t as bad as we thought” to “okay where does the economy go from here.” For every positive story there is negative news. There was a 17% increase in housing starts in May fueled by multi-family construction and the current strong stock market gains over the past 3 months but May Existing Home Sales came in lower than expected (source for both; Bloomberg). Oracle beat expectations while Fed Ex’s quarterly report was a disappointment (if we aren’t shipping, we aren’t recovering) and the World Bank lowered their global recovery hopes but the OECD (the Organization for Economic and Corporate Development) reported that the recession was bottoming.

There just isn’t enough information out there at this point to get a good feeling on where the economy goes from here. I mentioned in the last Virtus View that the probability is we enter a trading range, which I still believe is the probability.

Just so we don’t get bored waiting for that trading range to act out, which could take several months, there is a something to watch for short-term. Investment managers are known for “window dressing” at the quarter end when markets are rallying; which just means they load up on the out performing stocks at the end of a quarter to make their fund look better. I would not be surprised if we don’t see a little quarter end rally the last week or so of June.

In previous Virtus View’s I have mentioned Market Participation CDs as a way to lower risk. As we state here many times, risk equals reward. So obviously the CDs lower your upside as well. But if one truly believes we are in an extended bull market but worries about risk, why not add one of these CDs to protect your downside. The CDs can have upside of anywhere ranging from 10% to 20% but since they are FDIC insured, your principal is protected. Why do I mention them again now? With the market up over 40% for the past 3 months, historically the probability is slim that it goes up another 40% over the next year. Thus, if the market does continue to run you make some of the upside, but if the market drops you protect your downside. When the market was down 30%, these do not make much sense to me. But after a 40% rally, the risk reward ratio for buying stocks becomes higher; which might be a good time to protect the downside. If you want more information on how these work, please feel free to contact me. To receive your principal back, you must hold until maturity. You should consider any fees associated with this investment.

Don’t forget to check out our new website. If you have any questions please contact us at 817-717-3812.

Brian Tillotson
Wealth Manager

Virtus Wealth Management
2435 E. Southlake Blvd
Suite 120
Southlake, TX 76092
817-717-3812
866-407-4320
Fax: 817-416-6585
www.virtuswealth.com

Securities and Advisory Services offered through VSR Financial Services, Inc. Member FINRA / SIPC
The attached commentary contains opinions and analysis that are provided by the author for informational purposes only and should not be used as the primary basis for an investment decision. You should consult with Brian should you have any questions if this strategy is suitable for you. The technical analysis cannot guarantee a profit or protect against a loss.

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