2011: A Year of Great Angst

As I write this on the last trading day of the year, a gain or loss on the S&P index is still up in the air This, after 12 months of almost continuous volatility. The year included 67 “all or nothing” days—big gains and losses, all netting to zero. Many in the investment world certainly wished they had pulled a Rip Van Winkle and slept through 2011, saving themselves much weeping and gnashing of teeth.

Although we worked hard to rise above the thundering herd, our results were disappointing. We kept your assets safe, but growth eluded us. The companies we are invested in are making robust profits, pay handsome dividends and have, we feel, enduring earnings growth potential. Coupled with our covered call writing, it’s a strategy that has stood us in good stead over many years.

Unemployment, real estate values, and political chaos here and abroad weighed heavily on the economy. A presidential election will add to investors’ concerns in 2012. Although the New Year will begin with these negatives, we are seeing some signs of gradual improvement. The unemployment rate is in steady decline, the U.S. manufacturing sector continues to expand and construction spending is rising with gains in new home construction.

Now for the big news. After 28 years as a sole proprietor, we have formed Cantlon Financial Planning, LLC as our business structure for the future. This has allowed me to formally recognize Tom Guyett’s contribution to our success by issuing a membership interest to Tom. I am encouraged by Rob Gephart’s progress and believe he will one day develop into a member, with a vested interest in our results.

IMPORTANT: Pursuant to Sec 205[80b-5](a) (2) of the Investment Advisors Act of 1940 we need your approval to conduct business on your behalf due to our firm’s change. By making all future fee payments to Cantlon Financial Planning, LLC or CFP LLC, you will be acknowledging your consent, assigning the management of your accounts to the new entity.

Otherwise, it is business as usual. I work with Tom and Rob daily on investment strategy and selection to keep your investments sound. We thank you for your continued trust in us. As always, we welcome your inquiries and hope that you will plan to visit us this year.

Tax season is soon approaching. Once again we are offering income tax preparation through Rick Carlson. If you want Rick to handle your tax work, please gather your tax documents for submission in February.

Very Truly Yours,

Michael F. Cantlon