Foundation Directors & Investment Committee Members
This is the Year to Concentrate on
Capital Preservation and Renewed Growth
There is a reliable middle ground for managing Endowment investments that prescribes (a) internal growth, (b) preservation of capital, and (c) predictable income and withdrawals. Contrary to investment models that have been adopted by some of the largest and most sophisticated Endowments, our model is considerably less volatile, striving for predictability versus dramatic growth dynamics. As we have seen by recent performance statistics Yale, Harvard, Princeton, Stanford huge losses can occur even when the best and brightest managers lead the way forward. This is not meant to be a criticism of those managers for they are very talented and experienced individuals.
It is easy to criticize in hindsight - but not particularly productive. What we need to do is to look forward and rethink our long term goals and the timing of those goals. Less investment risk is probably in order; a greater emphasis on steady but slower internal growth will assure that we will be able to serve our constituents with steadily increasing contributions and funding fewer distributions now, mean more is available later, as our portfolios grow.
As an organization, High Desert Advisors develops strategies that reflect these concerns and goals. We will make a presentation to your investment committee, outlining such a strategy; we offer you investment management options that, perhaps, you have not considered before this time.
Date: January 21, 2010 ATTN:Endowment Executive Director RE:2010 - The Year to Concentrate Capital Preservation and Renewed Growth Large investment losses, caused by economic and stock market volatility, have occurred, putting into question the viability of all charitable commitments to our communities. Investment strategies have not achieved their desired goals. What needs to be done? Protect our assets; Make our money grow! We would like to meet with you and your investment committee to show you the details of an investment strategy that will serve you better than the strategy that you are using today. Flamboyant growth goals lead to the historical losses of the past ten years even for the best of the endowment managers Yale, Harvard, California Teachers. Reaching for high yields and rapid investment growth both are very desirable goals - set us up for investment portfolio losses! Predictable cash flows, even if those flows are lower than in the heydays of the late 1990s, will allow you to support your charities with confidence, into the future. Your charitable contributions do not have to be subject to the whims of the stock market. This letter will introduce you to High Desert Advisors, an SEC Registered Investment Advisor, located in the State of New Mexico. High Desert Advisors manages investment portfolios for the wealthy and the not-so-wealthy, investors who are retired or nearing retirement. The tools used and the decision making process designed for these clients, closely parallels that which is appropriate to managing Endowment Funds. For both, preservation of capital is paramount, periodic distributions are required, and internal portfolio growth as distinguished from new contributions to the Endowment - must be managed to provide stable income in perpetuity or until end of life. Sincerely, Dick Brackett, High Desert Investment Advisors
For an interesting article concerning proper management of funds, click here.
High Desert Investment Advisors 4801 Lang NE, Suite 110, Albuquerque NM 505-797-2644 or 505-469-3467
Serving Your Personal Investment Needs Since 2003
Information provided herein should not be considered financial advice. Please speak with your investment advisor.
High Desert Investment Advisors may transact business only in states in which it is registered, or in which it is excluded or exempted from registration. High Desert Investment Advisors is currently registered in the State of New Mexico, and has a de minimus exemption to transact business in other states.
Rotary Serves Your Community Every Day - Rotary Fosters International Peace & Is Eradicating Polio in the World Rotary is a major supporter of the Roadrunner Food Bank