The Importance of Our Participate Yet Protect Philosophy
We Take Downside Risk as Serious As you SHOULD!

We offer to share our ideas with you at no cost or obligation

A Mathematical Catch-up Game
Is it better to accumulate reasonable gains on a yearly basis or have years with exceptional returns combined with years of losses? While occasional large, positive returns may look attractive, ultimately it's consistency that may be the best approach. Need Proof?   

Proof in the Numbers
Suppose you invested $100,000 in the S&P500 Index* on March 24th 2000 just before the recent market decline. As of October 9th 2002, the bottom of the market decline the S&P500 Index had gone down about 49%. The value of your S&P500 investment would be only about $51,000. To fully recover from your 49% loss, you'd need to gain 96.08% versus the 49% you were down. Let's look at the numbers. 

 $51,000 x .9608 = $49,000 + $51,000 = $100,000  

 While the S&P500 “only” lost 49% the Nasdaq 100 lost 83%!

 While the current investment outlook appears quite favorable, there is always risk in the market and we continue to recommend “participate yet protect” portfolios to reduce downside risk as much as possible while still participating in market gains.  * Investors can not directly invest in indexes. 

A Look At Declines & Recoveries
From A Numbers Perspective



 

The graph shows how the larger a loss, the greater the subsequent recovery required to break-even.

 Therefore, a consistent approach to investing, which seeks to avoid negative returns, may prove to be more beneficial in the long run than aiming for sporadic short-term gains.

 

Consistent Investment Approach
Since founding Hutchison Financial Advisors, in 1981, Dave Hutchison, CFP has been dedicated to a participate yet protect approach to investing to reduce downside risk as much as possible in diversified investment portfolios we recommend for clients..

 
A Portfolio Designed For Bull and Bear Markets
Our philosophy on diversification has proven its importance over the last 3-years of market declines.  There are conservative investment options that have done very well even in the market decline.

Many new clients coming to us wish they had repositioned their portfolios for the realities of 2001-2003 instead of still being invested based on market conditions of the late 1990s.  We are in a totally different market environment today and portfolios have to be adjusted accordingly.

 
Because Risk Matters
We believe that you do not need to take as much market risk as we see when reviewing most new client portfolios, to achieve good long-term growth.

We believe the key to the best long-term investment returns is not so much hitting the biggest winners in a good market but avoiding the big losses in a falling market. This is because if you suffer a typical bear market loss of 37%, it takes a 59% gain to just break-even again.

We Take Your Financial Future As Seriously as YOU SHOULD !
Large enough to serve yet small enough to care
Committed to Success Through Client Satisfaction

Last updated 5/7/2008

Securities are offered through Multi-Financial Securities Corp, Member FINRA/SIPC. Investment advice is offered through Hutchison Investment Advisors, Inc, a Registered Investment Advisor. Multi-Financial Securities Corp. is not an affiliated company of Hutchison Investment Advisors, Inc., or Hutchison Financial Advisors.

CERTIFIED FINANCIAL PLANNERTM and are certification marks owned by the Certified Financial Planning Board of Standards, Inc. These marks are awarded to individuals who successfully complete the CFP Board's initial and ongoing certification requirements.