THE VIRTUS VIEW

Good afternoon to all.

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 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.

Please feel free to forward these e-mails to any friends you have who you believe will benefit from learning more about finances and investments.

With so many things going on currently, I thought I would add some thoughts on a multitude of items in bullet form this week.  

• In the January 23rd Virtus View I mentioned the probability was that we were going to test the lows of November, 2008.  We tested the lows and went right through.  Unfortunately we are still in the bottoming out process.

• From the high in 1972 to the low of 1974, the S&P 500 dropped 48%.  Since October 2007, the S&P 500 is down 56% (as of March 4, 2009).

• From 1929 to 1933 the DOW was down 87%.  Unemployment hit 25% in the 1930s.  Currently we are at approximately 8% unemployed according to government reports, which was the high point for the unemployment rate in the 1970s.  I expect unemployment to reach the 10% range by 2010.

• Retail sales had their best month in terms of % growth over the prior month in over a year in January 2009 (source: The Census Bureau of the Department of Commerce).

• Excluding bank stocks, GM and GE, there are 25 stocks in the DOW 30.  Of those, approximately 10 are currently paying dividends over 5%.  The current 10 year Treasury rate is under 3%, CD rates are in the 2% range, and money markets are paying less than 1% (source: Bloomberg Finance).

• In the February 20th Virtus View, I commented on the current stimulus plan due to many of you asking my thoughts.  The comments in that View were not a political stance or an opinion on our current leadership.  The purpose was to communicate that the current strategies have been used before and worked to certain degrees in improving GDP growth.  Even though we are inundated with bad news 24 hours a day, 7 days a week, I have hope.  

• As Warren Buffett stated in his 2008 annual report, “America’s best days lie ahead.”

• In the great depression the stock market bottomed in 1933.  From 1933 to 1943 the DOW grew at an average rate of 13.8% over that period.  Interestingly, the unemployment rate was still 19% in 1938.  Historically, the market has recovered earlier than actual signs of economic recovery (source; Seeking Alpha).  

• One stock market myth that has proven to be false many time over is the “this time is different.”  

• I believe patience is still important right now.     

The economic terrain continues to prove treacherous. We remain mindful of the angst that such difficult times create for many of you, and therefore hope to offset some of the pain by sharing with you both the good and bad news.  

Best Regards,

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
To opt out of this weekly e-mail, please just reply to this e-mail with “Opt Out” in the subject line.

Please feel free to forward this to any friends you believe will benefit from this information.

Past performance does not guarantee future performance.

To learn more about Virtus Wealth Management and how we may be able to help you, please visit our website or give us a call.  http://virtuswealth.com