With the markets down rather significantly the first week in August, we want to reassure you that we are on high alert and continue to mind the proverbial store. The hours of time spent researching companies, meeting management teams face-to-face, and our proven track record through Bull and Bear Markets over the past 37 years, reinforce our confidence in our current stable of portfolio investments. It also affords us the wherewithal and assurance to opportunistically invest when the market is down. We understand that stock market volatility can cause consternation and angst, but we believe that staying with our long-term investment strategy yields success.
Amidst the dubious macroeconomic headlines, the fundamentals at the company level are still well intact despite what their commensurate stock prices are showing over the past few trading sessions. We’d like to share a few of the positive points:
- Earnings have been solid for the 2Q thus far
- Profit margins are healthy
- Cash is building on company balance sheets
The FAM Funds’ holdings continue to build shareholder value for the future by:
- Paying and/or increasing dividends
- Buying back shares at favorable prices
- Participating in mergers and/or making acquisitions
- Reinvesting free cash flow back into their businesses both home and abroad
In our estimations, these activities will help to create growth for investors’ portfolios over the long run. We know that these are anxious times and the recent spike in stock market volatility has exacerbated uncertainties. We cannot emphasize enough how important it is to stay focused on the long term. We take our stewardship of your personal wealth very seriously and are working diligently to ensure that you are invested in secure American corporations. While volatility can be frightening over the short term, it may yield opportunities that provide for success in the long term. The cliche “stay the course” has never been more relevant than it is right now.
Remember that the stocks you own have real, tangible businesses behind them that create economic value despite what their stock market price is on any given day. Over the long run, it is economic growth at the business level (growth in earnings) that ultimately propels stock prices higher, outpaces inflation, and builds wealth for investors.