1st Quarter 2011 Commentary

Posted on Wednesday, April 27th, 2011

by James W. Heard, CFP®, President, Windham Brannon Financial Group, LLC

Investments and Markets

In a continuation of last years’ theme, the market defied the news of rising commodity prices, global conflicts, more sovereign debt concerns (including ours); and, if that were not enough, a 9.0 earthquake, 30-foot tsunami, and nuclear meltdown devastated the world’s third largest economy in Japan.  Despite the very difficult news, markets continued their upward surge leaving the pundits and market prognosticators wondering how to guess (and that’s what they do) the next market move.

Q1 2011 Last 12 Months
90-Day US Treasury (T-Bills) 0.03% 0.15%
BarCap Interm US Govt/Cr (Bonds) 0.34% 4.63%
S&P 500 (US Large Cap) 5.92% 15.65%
Russell 2000 (US Small Cap) 7.94% 25.27%
MSCI EAFE (International) 3.36% 10.42%
DJ US REITS (Real Estate) 7.20% 24.28%

Although the markets did take a small mid-quarter dip, their decline was less than one might have expected given the news, and markets rebounded nicely at the end of the quarter as the concerns lessened.  As I reviewed the portfolio reports at quarter’s end, I couldn’t help but notice that long-term returns were looking good again.  Patience, persistence, and more than a little courage once again has been rewarded.


Budgets, continuing resolutions, debt ceilings, default threats and deficits are continually in the news.  This is the first step to our finding solutions to our financial problems.  Love it or hate it, but the Ryan plan is the first serious plan that could lead our country back to financial sanity.  There are plenty of critics of the plan on both ends of the political spectrum, but until another legitimate alternative is offered, the Ryan budget will continue to drive the debate for the foreseeable future.

In the midst of all this uncertainty and global trauma, the good stock market begs the question – is the economy better than we think it is?  We’ll know in a few months, but this market is typical of one that leads better economic news.


We’re only a few months away from the 2012 Presidential election cycle beginning.  (I know you’re as excited about that as I am).  But I think the budget debate will dominate the news in the months ahead, making it difficult for candidates to gain much traction. The real political news will continue to come out of Washington as the budget debate gets hotter.  And it may get very hot.

Next up? – raising the debt ceiling, and expect the Republican House to demand real budget cuts this time in return for a long-term debt increase.  Since that probably won’t happen initially, expect short term debt ceiling increases tied to more modest cuts.  And then a few months later, they’ll do it again…and again…and again…until meaningful cuts and/or taxes are agreed upon.  It may get ugly, but it’s the necessary political process for a reasonable economic solution to our country’s financial problem.

What’s New

How about good news…Tarpley & Underwood Financial Advisors officially has joined our firm.  We look forward to introducing our new partners and associates to you and meeting their clients over time.

In reviewing our respective portfolios, we have identified small style differences in our investment approaches.  We expect to broaden slightly our fixed income strategy for our WBFG clients, and TUFA clients’ equity portfolios will have some modest changes to bring our two approaches into alignment.  All in all, the changes are minor, and in the end, we believe they represent better solutions for all our clients.  You’ll hear more later.

And finally…we’re moving!  We’ll be moving into the 3630 Building next to Phipps Plaza and the Ritz Residences with our accounting brethren.  When?…probably August/September.  We’ll invite everyone to check out the new digs when we’re in.  In the meantime, click here if you want to see the building location on Google maps.

Onward and upward!

Best regards –


© 2011 Windham Brannon Financial Group, LLC. All rights reserved. Any use of information contained in this article, including reproduction, modification, distribution or republication, without the prior written consent of Windham Brannon Financial Group, LLC is strictly prohibited.

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