California Investment Firm Successfully Navigates Market Volatility!

NOVATO, Calif., Feb. 8, 2012 /PRNewswire/ -- Investment advisor Winans International portfolio performance for 2011 was:

Other Key Statistics:

• WI's client base grew by 17% and 31% of Winans' clients have been with the firm over 10 years.
• 69% of the portfolios used in the composite are at five-year, record-high levels. The growth and the income portfolios have both significantly outperformed their benchmarks in both the five and nine-year timeframes.
• The growth portfolios used in the composite were able to match the performance of the S&P 500 Index while maintaining large cash balances to reduce portfolio volatility.
• The income portfolios used in the composite were able to outperform the income benchmark by limiting preferred stock investments in the financial sector.
• The income portfolios had an average annual yield of 7.8% with an average maturity of 3.8 years.

2012 & Beyond

Regardless of any short-term market advance, we expect the foreseeable future will resemble the economic challenges of the 1970's. During that time, major stock market averages traded within a well-defined range and other investment types (bonds, preferreds, reits, etc.) offered comparable returns to stocks.

Housing's falling prices and sales continue to be the elephant in the room in relation to the overall strength of this economic recovery. History tells us that there will not be a long running bull market in stocks until real estate prices have stabilized.

The fear of the government's monetary stimulus programs creating conditions for future inflation should cause higher price volatility for bonds with maturities exceeding 15 years. Investors should continue to limit fixed-income investments to 10 years and under.

Our investment strategy continues to be:

Common Stocks: WHEN to buy and sell is as important as WHAT to buy and sell during these types of market conditions. We believe profitable navigation of these market conditions is possible by using higher levels of investment rotation, a willingness to hold high levels of cash after significant market advances and/or strategically using some hedging during volatile downturns.

Corporate Bonds: Short to medium term bonds in stable companies are currently yielding five to seven percent annually. Cautious investors should consider investing a higher portion of their portfolios in the more predictable returns generated by corporate bonds rather than the ongoing volatility of a sideways moving stock market.

Preferred Stocks: We expect preferred stocks to maintain attractive yields. They can be a good addition for up to a 25% of an income portfolio.

Definitions:

1. Growth Investments - 100% growth oriented mid to large capitalized U.S. stocks
2. Income Investments - 100% income oriented investments (corporate bonds, reits, preferred stocks, mlps, etc.)
3. Benchmarks - Price Appreciation and Income of the S&P 500 Index and a corporate income composite (50% Dow Jones Corporate Bond Index, 50% S&P Preferred Stock Index).
4. Winans International Statistics – Net Internal Rate of Return (IRR-ROI).

The results portrayed relate only to a select group of WI's clients. They exclude the following:

1. Accounts opened for less than 12 months.
2. Portfolio size is less than $50,000 as of the year-end balance.
3. Clients who have changed their investment goal and/or asset allocation by more than 10% during the year, or have a variation allowance greater than 25%.
4. Net deposits and withdrawals are greater than or equal to 25% of the year-end balance.
5. Client selected investments make up 10% or more of portfolio holdings at year-end.
6. Clients have placed restrictions on the investment activities of WI at any time during year.
7. Winans International retirement plans, employee accounts, and employee spouse accounts.

Disclosures: Benchmark performance for each portfolio category is based on the strategic weightings described above and may differ from actual weightings of client holdings during the period displayed. Client portfolios included in each portfolio category are based on client's stated investment strategy and not on actual asset class weightings within each client's portfolio. The volatility of each benchmark may be materially different from that of the investment portfolio. The percentage of clients outperforming their benchmark may be less than shown if benchmark weightings were adjusted to reflect actual client asset weightings over the same period. The Difference percentage in performance between WI Net Return percentage and Benchmark percentage may be less than shown, or negative, if benchmark weightings were adjusted to reflect actual client asset weightings over same period. Past performance should not be taken as representative of future results. A portfolio's performance is a simple or straight average of the time weighted performance of the client portfolios included in each portfolio category and do not meet the requirements of an AIMR (GIBBS) track record. The portfolio performance presented may be materially different if using an asset-weighted average of the client portfolios' performance included in each portfolio category. The information supplied and the formula calculations used are considered reliable but cannot be guaranteed. Information supplied can change without notice. The performance results portrayed reflect the following: the deduction of expenses paid by the client during the period shown; and, the reinvestment of dividends, capital gains, and other earnings when appropriate (such may be invested in a money market fund or other cash equivalent pending reinvestment). The results portrayed may be materially different if excluded accounts were otherwise included in the performance presented.

Additional information is available upon request at www.winansintl.com

SOURCE Winans International

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