We provide you with financial tips on a regular basis to keep you educated on simple ways to manage your wealth. This month, however, we shift our focus. Along with striving to invest in solid companies, we believe that investing in others is especially important in life. More specifically, we consider our own investment this summer in our two interns, Vladimir and Kristen.

Involving these young professionals in our culture not only prepares the next generation of employees for the workforce, but it helps our firm grow as we embrace their perspectives and capabilities. Working as a team, we were able to accomplish many great projects this summer.

Our Equity Research Intern, Vladimir, worked closely with the Research Team in order to enhance its ability to analyze companies. He was instrumental in updating financial models, designing new templates, and assisting with industry-specific research as earnings reports were released. The Chisinau, Moldova native is a senior in the Financial Analysis Honors Program at the University at Albany.

Our Marketing Intern, Kristen, worked primarily with the Sales and Marketing Team to help with the quarterly and semi-annual communications. She also conducted timely research and provided promotional materials for the Fenimore Fore Youth and FAM 5K “Fund” Run/Walk charity events. Kristen is a senior at Elizabethtown College earning a BA in Spanish and BS in International Business.

As we say goodbye to these two students, we reflect on the idea that as we come alongside people and help them improve, we often receive more from the experience than we invest. We are inspired by this exchange and encourage you to continue helping others because investing, whether financially or in people, can yield very positive returns.


With the stock market swings this year, many of you may be rethinking your investment choices. Everyone seems to be talking about gold and you may be asking, “Is it a good investment?”

A record number of people invested in gold the past few years due to investor psychology – investors looking through the rearview mirror. What I mean is that gold outperformed stocks during the past decade and investors may be projecting these returns into the future. Although we must learn from the past, it is even more important to look ahead when investing.

Looking Back
We began the last decade in a period of “irrational exuberance” for stocks. Investors poured money into stocks and ignored other asset classes such as gold. This enthusiasm for stocks caused their valuations to become inflated. From these higher valuation levels the stock market was almost destined to decline. This is a classic example of “herd behavior” where investors chase returns from the best performing asset classes.

1/1/00	$283.3/Troy oz
12/31/09	$1,100/Troy oz
5/31/11	$1,536/Troy oz*

Meanwhile, the decade ended in financial distress which led to depressed stock valuations. This induced investors to flock to so-called “safe haven” investments like gold. Gold climbed along with the general rise in commodities that occurred throughout most of the decade and performed well.

Looking Ahead
Gold started this decade at historical highs. You may have seen “cash for gold” commercials and cash for gold kiosks in the mall, or you may have even been invited to a cash for gold party! These promotions point more to exuberance than a good value and your safe haven assets may not be as secure as you think. In fact, gold is not immune to losing value.

Stocks began this decade at reasonable valuation levels after rebounding from rock-bottom lows in March of 2009. While you should not expect the same returns that investors received in the ‘80s and ‘90s, it is likely that this decade may be better than the last. In fact, there have only been two decades in which the S&P 500 Index** had negative returns. The first was the 1930s and the second, you guessed it, was the last decade. So while gold may have a place in your portfolio, don’t make the mistake of ignoring stocks. For those investors who have stayed the course, the last couple of years have been good in the stock market.

Remember, stocks represent ownership in real companies. While we have challenges ahead, sound businesses continue to innovate, prosper, and grow. Despite what we may see in the rearview mirror, companies that have strong financials, sustainable competitive advantages, solid management teams, and reasonable valuations continue to be attractive investments over the long term.

So, consider Warren Buffett’s outlook on gold's value:
“Look, you could take all the gold that’s ever been mined, and it would fill a cube 67 feet in each direction. For what that’s worth at current gold prices, you could buy all - not some - all of the farmland in the United States. Plus, you could buy 10 Exxon Mobils, plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?”***


*Bloomberg (Electronic Database)
**The S&P 90 Index was used prior to 1957 (Ibbotson® SBBI®)
***CNNMoney, October 19, 2010