Shore_side_by_Carol_Sharkey(1).jpg
Shore_side_by_Carol_Sharkey

Financial Investment Committee

 

There is no doubt that the year 2022 was a very difficult year in the investment world.  The good fortune that we have enjoyed in the past years abruptly ended when the Federal Reserve continued to raise interest rates in an effort to reduce inflation. This causes bond prices to  decline including highest quality US Treasuries. The stock market normally must make adjustments which imply the likelihood of lower prices near term. H. M. Payson who manages our account has done well managing the difficult environment. Our account had a value of $635,352 as of December 31, 2022. 

For the calendar year 2022, the town incurred a reduction in value 15.6% or a decline of $117,863. As noted in our report for 2021, we can not always expect to achieve the high returns that we have enjoyed in recent years. Like the tides, values do decline, but they do rise as well, not always at our whim. The Federal Reserve has rapidly raised interest rates 8 times over the past year as of today. This forces bond values downward in an attempt to cool the economy. Bond values do not normally fluctuate this rapidly. The declines affect most bonds including US Government Treasuries. The stock markets globally have experienced many disruptions due to several well known factors. Prominently, the Ukraine-Russia war and the war on fighting inflation are the principal culprits. As noted above, like the tides, this too will change. 

 We have not adjusted our investment policy statement which outlines our conservative objectives and levels of risk. We have enjoyed generous appreciation from the beginning of this account on August 15, 2015. We received $430,000, and have grown the account as of March 23, 2023 (date of writing this report) to $636,352. This portfolio has generated $82,000 to offset the town’s portion of retirement costs for the past fiscal years, 2015-2022. For the current fiscal year ending on June 30, 2023, we are recommending a $21,000 withdrawal.