Truepoint’s 2009 Annual Client Meeting

The past twelve months have been an unprecedented time for financial markets in modern history. Against this backdrop, we convened our third Annual Client Meeting at the Cincinnati Art Museum. In this communication we highlight some of the key messages delivered to our clients and guests.

State of the Firm

We have not been immune to the economic and capital market gyrations; we have experienced a similar decline in our revenues as in our clients’ portfolios. However, Truepoint has remained profitable and we continue to carry no debt. We attribute our financial strength to strict financial management, deep client relationships and a strong business model which is based upon placing our clients’ interest first.

The volatility of the past eighteen months has made us better advisors. Given that risk tolerance is more dynamic than previously thought we are now applying more subjective assessments, such as employment stability, behavior styles and past market experience.

We’ve also confirmed that client communication is paramount, especially during uncertain times. And although we don’t always have all of the answers, one-on-one meetings and phone calls continue to be the best avenue for client communication. It is better to communicate in some form or fashion than to not communicate at all. Thus our communications have taken on many new forms in the past year: email blasts, TruepointInvestor.com journal entries, Webinars and conference calls. We have received positive feedback from our clients regarding our tendency to over communicate during these challenging times.

Lastly, we’ve gained insights from our team which led to the promotion of Steve Condon to Managing Director. Steve will be tasked with the day to day management of the firm, enhancing our value proposition of team integration and allowing our advisors to focus more on our clients. His focus will allow me to spend more time working with clients, on business development and on strategic initiatives.

Market Review and Truepoint Performance

When we convened in September of 2008, we, along with our keynote speaker Jason Zweig, Wall Street Journal columnist and behavioral finance expert, delivered the following key messages:

  • The market is a constant roller coaster
  • Natural human reaction is to buy when returns are good and sell when returns are poor
  • Most important action is non-action – maintaining discipline in the face of market turmoil
  • Significant returns can occur unexpectedly and in a very short timeframe
  • Investors who monitor their portfolios least closely achieve greater happiness and better investment results

As we progressed throughout the year we communicated to our client base on more than two dozen occasions specifically regarding market events. In reviewing some of those communications at the annual meeting, we demonstrated that our advice continues to remain the same:

  • Buy and Hold. Rebalance. Stay the Course.
  • Our advice has always been, and will always be, based on the scientific evidence, not on our opinions about where the market may be headed
  • Despite the dramatic roller coaster of the past twelve months, the average Truepoint portfolio has generated a positive result while the S&P 500 is down about 10%

Steve Condon reviewed how our portfolio management discipline has played out through the turbulence of the past three year period and that of the similarly volatile period at the beginning of the decade. His examples demonstrated in real terms how Truepoint portfolios are constructed to mitigate market risks and capture investment returns.

Dimensions of Investing

Eugene F. Fama, Jr., Vice President – Dimensional Fund Advisors, presented an educational and entertaining discussion on the various dimensions of investing. Gene’s background, son of Eugene F. Fama, Sr., otherwise known as the “Father of Modern Finance”, and a lifelong career at DFA added an academic and engaging flair to our program. Most notably Gene communicated and demonstrated the difference between hoping and expecting. That when one speculates on an investment, he is hoping for a certain outcome. However when one invests in the markets, he expects its outcome. The contrast between emotion and rationality resonated throughout his presentation.

If you would like a copy of the presentations delivered at the meeting, please contact Lisa Reynolds at (513) 792-6648 or [email protected], or to make an appointment or complimentary consultation.

Truepoint Wealth Counsel is a fee-only Registered Investment Adviser. Registration as an adviser does not connote a specific level of skill or training. More detail, including forms ADV Part 2A & 2B filed with the SEC, can be found at TruepointWealth.com. Neither the information, nor any opinion expressed, is to be construed as personalized investment, tax or legal advice. The accuracy and completeness of information presented from third-party sources cannot be guaranteed.

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