Summer 2013 Investment Letter {Conclusion & Disclaimer}

Today we publish the conclusion to our latest investment letter.

On average stocks will decline around 12% during any giving year and about every five years we’ll see a period of volatility greater than 20%.  It has been much lower over the past year.  Volatility is in general not the same sort of risk as the risk of an investment going to zero.  It is true that volatility can affect portfolios especially in the short term. That is why investors are generally advised to separate money they may need in say a six to twelve month period from their longer-term investments.  It is for these longer periods that most investors should be invested with some portion of their assets.  In this time frame as long as the American economy continues to be an agent of growth and innovation, equities are likely to continue their advances, albeit in fits and starts.  Think about this.  The 2007-2009 bear market and subsequent recession likely rivaled the Great Depression.  Yet as of this writing, a little over four years from the bottom of the bear market, stocks trade at all time highs.   Nobody knows if the market will continue its straight-line advance this year.  Volatility may reassert itself going forward.  But strategies can be utilized to take advantage of this.  Volatility is one of the reasons that money flow analysis is one of the four pillars of our investment process.  Hopefully our studies in this area allow us to redeploy cash from areas of the market that are over bought into those investments which we believe have sound fundamentals and are over sold.  These disciplines are one of the principle reasons we are becoming more attracted to markets abroad.

Christopher R. English is the President and founder of Lumen Capital Management, LLC. -A Registered Investment Advisor regulated by the State of Illinois. A copy of our ADV Part II is available upon request. We manage portfolios for private investors and also manage a private investment partnership. The information derived in these reports is taken from sources deemed reliable but cannot be guaranteed. Mr. English may, from time to time, write about stocks or other assets in which he or other family members has an investment. In such cases appropriate discloser is made. Lumen Capital Management, LLC provides investment advice or recommendations only for its clientele. As such the information contained herein is designed solely for the clients or contacts of Lumen Capital Management, LLC and is not meant to be considered general investment advice. Mr. English may be reached at Lumencapital@hotmail.com.