By Scott Ronalds

From our Quarterly Report:

In the Q4 brief last year, my goal for our clients was “another unremarkable year”. We had come through a tough period in the markets in good shape, but with interest rates even lower and the economic and political outlook looking scary, ‘unremarkable’ seemed like a reasonable target. Fortunately, my aim was low. Portfolio returns in 2012 were much better.

The factors that fueled 2011’s modest returns were the same ones behind 2012’s healthier numbers. It was a good year for corporate bonds, high quality companies (strong cash flow, little or no debt, growing dividends) and yes, foreign stocks. All of these types of securities were prominently featured in our funds. While my big picture views have been ‘approximately right’, our fund managers have been ‘right on’ with their allocations and security selections. All in all, our balanced clients again achieved returns well in excess of the indexes in 2012.

Read Tom's full brief and the rest of our report here.