The Year In Review

December 27, 2011
	The briefing was updated yesterday and can be found in The Briefing Room. A headline in The Telegraph today: "Hedge funds hammered in one of worst years on record."  As many of you know we at PivotPoint Advisors fancy ourselves as a type of hedge fund for normal people.  Hedge funds try to protect your capital without giving up the ability to make a good return.  If the market is down 50%, their objective isn't to only be down 45% and brag about 5% outperformance.  They don't ever want to lose money even if the market is having another horrific year.  The kicker though, is even with the focus of not losing money, they desire is to never limit the potential upside return.  CD's guarantee you won't lose money but they also limit your upside return.  Unfortunately you need to have over a million dollars if you want to invest in one.  We have this same objective, but our minimums (or lack thereof) suit the common investor.  I wrote a white paper earlier in the year comparing the hedge fund investment objective with that of the mutual fund's asset allocation and diversification.  if interested you can find a copy of that paper here.  The article in The Telegraph goes on to say  "the Hedge fund managers have been hammered by volatile markets that have more often been dictated by political calls in the eurozone than company fundamentals."   We all have seen the volatility in the market this year.  It has given more false signals than an airline has late flights (humor inserted here).  It has been  very difficult keeping positive account values while the market does nothing but tell us lies. The good news is that even through one of the most difficult years in the history of hedge funds, we've managed to protect the capital in our accounts from large draw downs while keeping volatility to a minimum.  I've said numerous times that a time will come when it is much easier to make money.  We want to have our accounts intact when that opportunity arises.  Our Moderately Aggressive model vs the S&P 500 index is below updated through Dec. 19th. I remember as we neared the end of 1999.  The market was the highest it had ever been, y2k was coming which we never experienced before and we were entering a new decade.  The beginning of the prior 4 decades were recessionary.  Even though many were piling money into tech stocks due to the huge returns that year, we began moving to safety.  Hindsight being perfect, 2000 nd 2001 were very difficult years.  2012 gives me the same feeling as 2000 did.  We will see if my feelings come true. I hope you all had a very Merry Christmas and wish you a Happy New Year! Have a great day!! John Norquay CEO PivotPoint Advisors		In order to view the graphs and charts in our newsletter, please click the link at the top of your email to "always show images from PivotPoint Advisors" Resources Check out our Youtube Channel  Like our FaceBook FAN Page We manage money inside 401k plans. Know anyone who may want to use us? Click "Forward to a friend" (immediately below) to share this newsletter with friends you think may appreciate our services. Forward to a Friend Twitter Subscribe to the Weekly Briefing Report Unsubscribe Update Subscription Preferences View Email In Browser