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Strategic Insights (May 7-11): "The Great Wall (Of Worry)"

Sat, 12 May 2012 15:57:54 -0400

We are pleased to enclose the latest edition of Strategic Insights, our weekly independent commentary on the economy, financial markets and investment strategy.

Strategic Insights (April 30 - May 4): "Growth - A Muddy Track"

Sat, 05 May 2012 15:57:54 -0400

We are pleased to enclose the latest edition of Strategic Insights, our weekly independent commentary on the economy, financial markets and investment strategy.

Press Release - Clinton Kane Joins the Strategic Team

Fri, 04 May 2012 12:00:00 -0400

Strategic Financial Services is pleased to welcome Clinton Kane to the firm as an associate in the Corporate Retirement Plan group. Clint will work directly with participants and employers to coordinate all operational and education responsibilities.

Clint comes to Strategic after seven years with CoughlinGiambrone, where he earned his FINRA series 7, 63, and 66 licenses, Registered Para Planner designation, and Certified Fund Specialist designation.

“The team here at Strategic is absolutely first class. I am surrounded by intelligent, hardworking, enthusiastic colleagues, and I am excited to have the opportunity to work and grow with such a great firm,” said Kane.

Clint is a 2007 graduate of SUNY IT where he received his B.S. in Business Administration.

“The experience, skill set and ambition that Clint brings with him to Strategic will make him an excellent fit and we are excited to have him come on board,” said Laura Hailston, Director of Retirement Plan Services at Strategic.

Strategic Financial Services is an independent financial advisory firm that manages assets for individuals, businesses, and not-for-profit organizations. Areas of expertise include asset management, financial planning, and company sponsored retirement plans.

Company headquarters are located at 114 Business Park Drive, Utica, New York with additional offices in Syracuse, NY and West Palm Beach, Florida. For more information call 315.724.1776 or visit us at www.investstrategic.com.

Please contact Michael Leist at 315.724.1776 for additional information or interview availability.

Press Release - Michael Leist Joins the Strategic Team

Fri, 04 May 2012 12:00:00 -0400

Judith Vicks Sweet, Partner and Chief Financial Officer of Strategic Financial Services, is pleased to announce that Michael Leist has joined the firm to lead business development and marketing efforts.

Additionally, he will help bolster the firm’s communications platform to provide timely updates and deliver original content to inform, to educate and to keep Strategic clients up-to-date on important developments shaping the investment world.

Prior to joining Strategic, Mike was an associate and member of the investment team at Monument Group, a Boston-based firm specializing in the marketing and placement of alternative investment opportunities.

“I am thrilled to be returning home to Utica to join a firm that has been a staple in this industry and the CNY community for over 30 years. With a unique blend of seasoned executives and young, energetic talent, the firm is positioned to continue providing the highest quality of service to our clients for generations to come,” said Leist.

Mike is a graduate of Tufts University where he received his B.A. in Economics. He holds series 7 and 63 securities licenses.

“Mike’s experience in Boston will be perfect for Strategic. He has the necessary expertise to bring us to a new level in providing transparent and timely information to our clients, along with using current technology to grow and enhance the firm,” said Sweet.

Strategic Financial Services is an independent financial advisory firm that manages assets for individuals, businesses, and not-for-profit organizations. Areas of expertise include asset management, financial planning, and company sponsored retirement plans.

Company headquarters are located at 114 Business Park Drive, Utica, New York with additional offices in Syracuse, NY and West Palm Beach, Florida. For more information call 315.724.1776 or visit us at www.investstrategic.com.

Please contact Michael Leist at 315.724.1776 for additional information or interview availability.

Strategic's Laura Hailston In The News

Tue, 17 Apr 2012 15:57:54 -0400

Salvation Army's "The Others" award dinner set for May 17

By WKTV News

Story Created: Apr 12, 2012 at 11:47 AM EDT

HERKIMER, N.Y. (WKTV) - The Herkimer chapter of the Salvation Army saluted its volunteers on Thursday, gathering around 9 a.m. to give thanks to a number of community members who have volunteered for the organization and others like it over the past several years.

Laura Hailston, a representative with the Salvation Army says that the organization is hoping others will see the good things that can be done with just a little help from those pitching in.

"I think that what you find is that most people, when they start to give a little of their time, it's like a snowball effect and the next thing you know, you have very involved members of the community, which is ultimately the goal."

The Salvation Army is officially holding what's being called "The Others" awards next month, on May 17, where they're going to be honoring Ed View Jr.

The Civic Dinner is taking place at Francesca's Banquet Hall in Ilion.

In The News - Strategic Selected as a CNY Business Journal Panelist

Sat, 11 Feb 2012 15:57:54 -0500

Strategic was selected to provide expertise as a panelist in the CNY Business Journal Financial Quarterly publication. Please read below to find out our views on the market, economy and investing. Strategic Financial Services is a registered investment advisor managing and advising on over $800 million in client assets.

Q. What is your view on where the financial markets are headed in the coming months?

A. In November of last year, we expected continued volatility in the equity markets with a bias to the upside supported by solid company fundamentals and attractive valuations. This view was decidedly contrarian as market participants were positioned defensively in response to the euro zone crisis and an uncertain domestic economic outlook. Over the course of the past 3 months, the market has rallied impressively with a return of approximately 7%.

Strategic’s investment process emphasizes valuation as a primary input for our single security and asset allocation work. Currently, we believe equity markets are valued fairly to slightly extended after the recent rally. We expect some profit taking as investors recognize that market valuation has been reset higher (although still depressed by historical standards though) in light of less robust corporate profits in the fourth quarter. Structural macro-economic issues in Europe, the United States and even China, remain in place despite some recent improvements in the headline numbers. In addition, the political status quo threatens recovering investor sentiment as election year gamesmanship is played around critical issues such as unemployment benefits and the debt ceiling. Our base case scenario calls for stocks to take a breather to digest recent gains over the coming months. The market should be range bound with risks slightly skewed to the downside.

Despite near-term caution, Strategic believes that stocks are positioned to outperform bonds and patient investors could be rewarded handsomely over the longer term. Future performance is never guaranteed.

Q. How will election-year politics will affect the markets and the economy?

A. A US election not only has the general public excited, but it has implications for the markets and the economy as well.

A look at the 23 election years since 1920 tells us that 68% were positive, in-line with non-election years. So it seems election years do not have an outsized effect on market performance. On average though, stocks have seen greater strength when Republicans have been elected.

Election year politics will result in a continuation of the “status quo”, with neither party willing to compromise on key issues. Additional concrete steps are required on the fiscal front to foster economic growth. Reigning in the budget deficit through lower spending and laying out clear policies that boost business investment, encourage hiring and lead to a recovery in the residential housing market would go a long way towards a more structural long-term recovery. In recent times, the Federal Reserve has been willing to fill in for the lack of fiscal action from the government through accommodative monetary policies, an unsustainable course of action in our opinion.

Q. Provide specific recommendations for investments that clients should be making right now.

A. For most of the past year, strong performance at the corporate level was overshadowed by macro-economic concerns. Given that the equity markets have now rallied over 20% since their October lows as some of the big picture concerns have eased, the easy money has been made and selective stock picking has become more important. Value still can be found in selected segments of the stock market.

While we prefer to approach the discussion of investment recommendations within the context of a portfolio perspective, we understand that specific stock picks are more likely to garner the reader’s attention. Currently, we believe Google Inc (Symbol GOOG, $608), the online search behemoth deserves a look. The company is a leader in desktop based online advertising, and we expect robust growth over the coming years in the space. The continued shift of advertising dollars from traditional media to online channels in the developed world and increasing penetration in emerging markets should continue to drive Google ahead. Google should further benefit from other growth avenues such as Mobile advertising through the proliferation of Android mobile phones and display advertising though enhanced YouTube monetization. Other initiatives such as Mobile wallet, Google Offers, and Google + should provide incremental benefits over the next 5 years. We continue to see Google as a 15%+ grower trading at an attractive value for its growth profile.

Q. What do you see as the greatest risks investors need to be aware of and seek to avoid in the coming months?

A. We believe investors should be wary of chasing returns in the near term and willing to take profits when valuations become extended. As an example in the fixed income space, we recently took profits on behalf of our clients in Treasury Inflation Protected Securities after a return of over 10% in 2011.

When equity markets are driven too much by investor sentiment emanating from bigger picture macro-economic issues, heightened volatility is the order of the day. Emotion based short term tactical decisions expose investors to the risk of being whipsawed and making ruinous longer term investment decisions. We advise investors to allocate investment capital prudently for the longer term within a customized framework of well-defined risk and return objectives so that portfolios are positioned properly for the inevitability of the occasional stock market sell-off.

Vinayak Rao
Portfolio Manager

Disclosure:

Strategic owns Google Inc. in at least one of our equity strategies. Strategic does not make a market in Google Inc. The security identified and described does not represent all of the securities purchased, sold or recommended for client accounts. The reader should not assume that an investment in the security identified was or will be profitable. A full list of securities held in our equity strategies over the past 12 months will be presented upon request.

Strategy Snapshot - Q4 2011

Wed, 28 Dec 2011 15:57:54 -0500

"You Can Go Home Again"

In previous editions of the Strategy Snapshot, we ventured abroad to discuss the role of developing economies and the emerging consumer within the global capital market system. As the New Year approaches, we return home to find value, opportunity and even a degree of comfort in what remains an uncertain world.

The psychology of the market swings like a pendulum across market cycles. Optimism and fear engage in a perpetual struggle to capture the hearts and minds of stock market participants. On occasion, a clear winner emerges and share prices move to extremes. Successful investors approach these moments with a skeptical eye, a contrarian attitude and a willingness to endure short-term bouts of volatility in pursuit of longer-term goals.

The “New Economy” of the 1990s brought with it the myth of a new paradigm in the global markets, a golden age of productivity that would all but ensure perpetual growth unfettered by pesky historical norms like economic cycles, inflation or unemployment. The stock market was assigned an unreasonable and ultimately unsustainable valuation as the exuberance of the era infected investor psyche. The pendulum now has swung towards the other extreme as the volatility and anemic returns of the recent past have shaken the confidence of equity investors.

To be sure, serious global issues confront stock market participants. The euro zone is struggling to solve difficult fiscal challenges, as is the United States for that matter. Social unrest is percolating with government leadership fragmented, while the global economy, including China, is slowing. With memories of the 2008 crisis fresh in their minds, investors are understandably wary of risk and are shunning stocks in favor of assets they believe are safer. Aided by a media complex that sells fear and sensationalism, investors have become conditioned to look around the corner for the next crisis. For an investor to be successful in uncertain times, however, the problems of the day must be taken within the context of the market moment with an eye on longer-term goals. Specifically, to what extent have current stock prices properly discounted an uncertain future?

The U.S. stock market has spent the better part of the past thirteen years paying for the technology inspired greed of the late 1990s and a decades-long global borrowing binge that is just beginning to unwind. Over this period, corporate earnings have more than doubled, but the stock market has failed to advance. Investors, scarred by unpredictable market swings, have stubbornly refused to pay a premium, or even a fair value in some cases, for the strong performance of American companies. And who could blame them? The result has been a market that has gotten much less expensive in recent years as seen in the price-to-earnings graph for the S&P 500.

It is tempting to ring the bell and say that stocks are on sale. They are not. We will repeat this point as it is critical. The market is not cheap. Yes, prices relative to earnings are well below the historical average, but the macroeconomic headwinds outlined earlier lead our team to the conclusion that stocks are fairly valued at today’s levels. As we saw during recent rallies, however, valuation is beginning to provide a margin of safety that instills confidence in would-be buyers as they step in during periods of market weakness. This type of price action based on company fundamentals may be the start of a healing phase that allows investors to return to stocks with more conviction over time. A foundation is being built for a sustainable move higher in the years ahead. And, while the timing of meaningful market reversals is notoriously difficult to predict, the long-term message is clear. In the words of Warren Buffet, "Be fearful when others are greedy and greedy when others are fearful."

Portfolio Strategy: Income and Sustainable Growth

The deleveraging cycle in the developed markets will be with us for the foreseeable future. There is simply too much global debt, and we will spend years getting our collective balance sheets back in order. Nevertheless, persistent investors can capitalize on the opportunities offered by this period of unusual uncertainty and potential value, as long as they maintain the proper respect for risk within a well-diversified portfolio.

The single most important determinant of a stock’s long-term performance is share price in relation to a company’s intrinsic value. It is under this axiom that Strategic is finding opportunity in selected segments of the market. A repeatable, disciplined process focused on fundamentals and mindful of the big picture will lead investors to high-quality stocks that can thrive in an uncertain environment. At Strategic, we prefer attractively valued companies, led by solid management, that can extend sustainable competitive advantages over the long-term while returning cash to shareholders now. Defendable business models, pricing power, balance sheet strength, stable or growing earnings, and ample free cash flow are among the metrics that we consider for our individual stock strategies.

Company Spotlight I: Colgate-Palmolive

We added to a core position in Colgate-Palmolive (CL). A familiar name to Strategic investors, Colgate is a leading consumer products company with dominant market positions in four global businesses: oral care, personal care, home care and pet nutrition. For readers interested in a “stock tip”, Colgate is admittedly a bit mundane. However, in a world where consistency and reliability are in short supply, the investment of client capital in a firm that demonstrates a superior growth profile, attractive emerging market exposure, earnings visibility and a healthy dividend is a prudent decision in our opinion.

Company Spotlight II: Oracle

Oracle’s (ORCL) share price has come under pressure recently due to a lack of visibility in corporate spending plans. We view the sell-off as an opportunity to build a long-term position in a leading worldwide provider of business software and hardware systems. Operating in over 145 countries and in partnership with over 380,000 customers, Oracle’s integrated portfolio of solutions is the industry standard. We see numerous catalysts for growth in the coming years, including the move to a cloud based delivery system and an applications upgrade cycle. A $17 billion net cash balance supports an accelerating share buyback program, a modest dividend, a robust research & development program and strategic acquisitions.

Firm Update: New Team Members

We are pleased to have welcomed several exceptional professionals to the Strategic investment team in 2011

Aaron Evans returned home to Upstate NY from Boston, MA to join Strategic as an equity research analyst and financial planning associate. Prior to Strategic, Aaron was an engineer for Lockheed Martin where he designed defense solutions for the United States Armed Forces. He holds an MBA in Finance and a BS in Electrical and Computer Engineering, both degrees from the University of Rochester. Currently, Aaron is studying for Level II of the CFA program.

Other recent additions to the team include David Lemire, CFA and Robert Hanft. Dave, the former president of the Investment Advisory Division at Adirondack Financial Services, joined the firm in September as a managing director and senior market strategist. Bob, the former chief operating officer of the Global Equities Group at JP Morgan in Manhattan, joined Strategic in October as a company adviser and member of the investment committee.

As always, please contact any of us here at Strategic with comments or if we can be of service to you.

Thank you and Happy New Year!

Alan R. Leist, III, CFA

In The News - SUNYIT honors alumna Iris Buczkowski for planned gift

Thu, 22 Dec 2011 12:00:00 -0500

"SUNYIT honors alumna Iris Buczkowski for planned gift"

Click Here to view the complete article on RomeSentinel.com.

Strategic Financial Services is an independent financial advisory firm that manages assets for individuals, businesses, and not-for-profit organizations. Areas of expertise include asset management, financial planning, and company sponsored retirement plans.

Company headquarters are located at 114 Business Park Drive, Utica, New York with additional offices in Syracuse, NY and West Palm Beach, Florida. For more information call 315.724.1776 or visit us at www.investstrategic.com.

Please contact Andrew Thurston at 315.724.1776 for additional information or interview availability.

Press Release - Aaron Evans Joins the Strategic Team

Tue, 20 Dec 2011 12:00:00 -0500

Strategic Financial Services is pleased to welcome Aaron Evans to the firm as a Financial Planning Associate and member of the investment team as a Research Analyst.

Prior to joining Strategic, Aaron managed and designed defense solutions for the United States Armed Forces with Lockheed Martin Corporation in Boston. “I returned home to be a part of a talented team with a common focus on providing first class investment solutions and service to its clients. I wanted to be a part of that existing success, and also to help Strategic continue to excel in the future,” said Evans.

Aaron earned his Master of Business Administration (MBA) Degree in finance from the University of Rochester and is now a 2012 Level II candidate in the CFA program. He was a graduate fellow in Engineering Leadership at Northeastern University and holds a Bachelor’s Degree in electrical and computer engineering from the University of Rochester.

“Aaron is an exceptionally talented young professional that will add great value to our clients. We are fortunate to have him return to Upstate New York and join the Strategic team," said Alan R. Leist Jr., CFP, and Chief Executive Officer at Strategic.

Strategic Financial Services is an independent financial advisory firm that manages assets for individuals, businesses, and not-for-profit organizations. Areas of expertise include asset management, financial planning, and company sponsored retirement plans.

Company headquarters are located at 114 Business Park Drive, Utica, New York with additional offices in Syracuse, NY and West Palm Beach, Florida. For more information call 315.724.1776 or visit us at www.investstrategic.com.

Please contact Andrew Thurston at 315.724.1776 for additional information or interview availability.

In The News - Strategic is a Proud Supporter of 26th Annual ARC Gala

Wed, 14 Dec 2011 15:57:54 -0500

Click Here for more information on the 26th Annual ARC Gala.

In The News - Strategic is a Proud Supporter of The Leatherstocking Ballet

Wed, 30 Nov 2011 15:57:54 -0500

Click here for more information on The Leatherstocking Ballet.

Press Release - Traci Grogan Joins the Strategic Client Support Team

Fri, 18 Nov 2011 12:00:00 -0500

Judith Vicks Sweet, CFA, Principal at Strategic Financial Services is pleased to announce the addition of Traci Grogan to the client support team.

Prior to joining Strategic, Traci worked for Hamilton College as an Administrative Assistant and Northland Communications as an Executive Assistant. She is a graduate of Central City Business Institute, Syracuse NY.

"We are so pleased to have Traci return to the Strategic team. Her commitment to outstanding service will be a real asset for our clients." – said Sweet.

Strategic Financial Services is an independent financial advisory firm that manages assets for individuals, businesses, and not-for-profit organizations. Areas of expertise include asset management, financial planning, and company sponsored retirement plans.

Company headquarters are located at 114 Business Park Drive, Utica, New York with additional offices in Syracuse, NY and West Palm Beach, Florida. For more information call 315.724.1776 or visit us at www.investstrategic.com.

Please contact Andrew Thurston at 315.724.1776 for additional information or interview availability.

Press Release - Michael McGraw Joins the Strategic Client Support Team

Thu, 03 Nov 2011 12:00:00 -0400

Alan R. Leist, Jr., CFP, Chief Executive Officer at Strategic Financial Services is pleased to announce the addition of Michael J. McGraw to the client support team.

Prior to joining Strategic, Michael worked for Hudson Valley Community College as an Accounting Adjunct Professor and Key Bank as a supervisor.
Michael has a Masters Degree in Education from Buffalo State College and a Bachelors Degree in Business Administration from SUNY Buffalo.

Strategic Financial Services is an independent financial advisory firm that manages assets for individuals, businesses, and not-for-profit organizations. Areas of expertise include asset management, financial planning, and company sponsored retirement plans.

Company headquarters are located at 114 Business Park Drive, Utica, New York with additional offices in Syracuse, NY and West Palm Beach, Florida. For more information call 315.724.1776 or visit us at www.investstrategic.com.

Please contact Andrew Thurston at 315.724.1776 for additional information or interview availability.

In The News - Strategic Selected as a CNY Business Journal Panelist

Tue, 01 Nov 2011 15:57:54 -0400

Q. What is your view on where the financial markets are headed in the coming months?

A. Our base case scenario calls for the equity markets to trade into a higher range over the coming months. Solid company fundamentals should begin to provide support against the uncertain macroeconomic backdrop.

The “risk-on/risk-off” short-term focus of the markets will continue to dominate investor behavior. As a result, stocks will undergo additional bouts of unusual volatility in the months ahead. Several situations bear watching as investors navigate these choppy waters. Specifically, the euro zone debt crisis and a stalled economic recovery in the developed world are all too familiar narratives. Competition for the lead story is heating up, however, as social unrest; the election cycle and a potential slowdown in China enter into the picture. In the midst of such uncertainty, it should be no surprise that investors are largely ignoring company valuations and earnings….for now.

Q. Provide specific recommendations for investments that clients should be making right now.

A. Strong performance at the corporate level has been overshadowed by big picture concerns. Investors have become increasingly risk adverse, overlooking strong bottom-up fundamentals in favor of the perceived safety of bonds, gold and even cash. And although we expect to see earnings estimates come down a bit in the coming months, value can now be found in many segments of the stock market. Over the past decade, for example, the earnings of large companies as tracked by the S&P 500 Index have more than doubled while share prices have remained relatively flat. And while stocks can stay inexpensive for an extended period, we see this trend reversing, perhaps powerfully, in the years ahead. Strategic believes that stocks are positioned to outperform bonds over the next decade and that today’s prices offer an attractive entry point. Patient investors could be rewarded handsomely for taking prudent risk in the stock market now. Future performance is never guaranteed.

While we prefer to approach the discussion of investment recommendations within the context of a portfolio perspective, we understand that specific stock picks are more likely to garner the reader’s attention. With that said, the communication equipment company Qualcomm (Symbol: QCOM) deserves a look. Significant intellectual property rights in the growing wireless business make the company a leading beneficiary of the mobile smart phone revolution. A clean balance sheet, strong cash flows and attractive valuation add to the stock’s appeal.

Q. What are some specific alternative investments (i.e. commodities, currencies, real estate, land etc.) that clients should be considering now?

A. In an uncertain macroeconomic environment featuring extraordinarily accommodative monetary policy, the looming threat of inflation and extreme volatility; hard assets certainly warrant a place in investor accounts. These holdings tend to offer diversification benefits within a traditional portfolio of stocks and bonds. At Strategic, marketable alternative investments are included in client portfolios where suitable. These investments include exposure to precious metals, natural resources and real estate.

Q. What do you see as the greatest risks investors need to be aware of and seek to avoid in the coming months?

A. Benjamin Graham, the original practitioner of value investing, opined that true investors, as opposed to speculators, need not be overly concerned with the daily fluctuations of the stock market. This is, of course, easier said than done, but there is certainly a kernel of truth in his wisdom.

When a market is overly focused on macroeconomic issues, there exists the heightened risk that individual stock prices will overshoot to the downside as investors react to headline stories. Emotions, left unchecked by a disciplined investment approach, can lead to ruinous investment decisions. Investors must prudently allocate investment capital within a customized framework of well-defined risk and return objectives so that portfolios are properly positioned for the inevitability of the occasional stock market sell-off.

Alan R. Leist III CFA
Managing Director

Disclosure:
Strategic owns Qualcomm Inc. in at least one of our equity strategies. The security identified and described does not represent all of the securities purchased, sold or recommended for client accounts. The reader should not assume that an investment in the securities identified was or will be profitable. A full list of securities held in our equity strategies over the past 12 months will be presented upon request.

Press Release - Robert Hanft Joins the Strategic Investment Team

Mon, 24 Oct 2011 12:00:00 -0400

Alan R. Leist, Jr., CFP, Chief Executive Officer at Strategic Financial Services is pleased to announce the addition of Robert S. Hanft as an advisor to the investment team. Mr. Hanft brings nearly 40 years of investment industry experience to his work with Strategic.

For 30 years, Mr. Hanft worked at JPMorgan Chase in Manhattan. During his career at JPMorgan, he held a variety of positions including Co-Head of Equity Research & Sales and Chief Operating Officer of the Global Equities Group. He was also Senior Vice President with American International Group (AIG) and Managing Director with the Trinsum Group, a specialized investment banking company

“Bob’s experience and insight will prove to be invaluable resources for the firm and investment team as we manage client assets across market cycles” said Leist.

Strategic Financial Services is an independent financial advisory firm that manages assets for individuals, businesses, and not-for-profit organizations. Areas of expertise include asset management, financial planning, and company sponsored retirement plans.

Company headquarters are located at 114 Business Park Drive, Utica, New York with additional offices in Syracuse, NY and West Palm Beach, Florida. For more information call 315.724.1776 or visit us at www.investstrategic.com.

Please contact Andrew Thurston at 315.724.1776 for additional information or interview availability.

Press Release - Strategic’s Thurston Passes Level II of the CFA Program

Mon, 24 Oct 2011 12:00:00 -0400

Strategic Financial Services is pleased to announce that Andy Thurston has successfully completed level II of the Chartered Financial Analyst (CFA) Program. He is registered to sit for June 2012 CFA level III examination.

Andy joined Strategic in January of 2011 to lead the firm’s marketing and business development initiatives. He serves as a member of the investment committee and provides analytical support to the investment team. Andy previously worked as a financial analyst at The Ayco Company L.P., a Goldman Sachs company. He studied accounting at Siena College.

“Pursuing the CFA charter requires focus and commitment, requisite qualities of anyone hoping to succeed in the investment industry and a significant part of the culture Strategic has fostered over the past 30 years,” said Thurston.

Strategic Financial Services is an independent financial advisory firm that manages assets for individuals, businesses, and not-for-profit organizations. Areas of expertise include asset management, financial planning, and company sponsored retirement plans.

Company headquarters are located at 114 Business Park Drive, Utica, New York with additional offices in Syracuse, NY and West Palm Beach, Florida. For more information call 315.724.1776 or visit us at www.investstrategic.com.

Please contact Andrew Thurston at 315.724.1776 for additional information or interview availability.

Press Release - David Lemire, CFA Joins the Strategic Team

Fri, 07 Oct 2011 12:00:00 -0400

Strategic Financial Services is pleased to welcome David S. Lemire, CFA to the firm as a Managing Director on the firm’s investment and executive committees. Dave will work with private clients and institutions in the management of their investments. In addition, he will oversee the firm’s asset allocation strategies.

Dave comes to Strategic from Adirondack Financial Services, where he served as President of the Investment Advisory Division. Dave joins Judith Vicks Sweet and Alan R. Leist, III as CFA Charterholders at the firm. He earned his Master of Business Administration (MBA) degree from Fordham University and studied Political Science at Kenyon College.

“We continue to build our team with outstanding professionals who share our commitment to client service and passion for investment management work. Dave’s extensive experience will add great value to Strategic’s clients.” said Sweet.

Strategic Financial Services is an independent financial advisory firm that manages assets for individuals, businesses, and not-for-profit organizations. Areas of expertise include asset management, financial planning, and company sponsored retirement plans.

Company headquarters are located at 114 Business Park Drive, Utica, New York with additional offices in Syracuse, NY and West Palm Beach, Florida. For more information call 315.724.1776 or visit us at www.investstrategic.com.

Please contact Andrew Thurston at 315.724.1776 for additional information or interview availability.

Press Release - Strategic’s Rao Passes Level III of the CFA Program

Fri, 07 Oct 2011 12:00:00 -0400

Strategic Financial Services is pleased to announce that Vinayak Rao has successfully completed the third and final level of the Chartered Financial Analyst (CFA) Program.

In 2010, Vinayak joined Strategic after graduating from Duke University’s Fuqua School of Business. Prior to Duke, he studied Computer Engineering at the University of Delhi in India. He is an equity portfolio manager at Strategic and serves on the firm’s investment committee.

“Completing the Chartered Financial Analyst (CFA) testing series requires passion and dedication, both of which are defining characteristics of the work culture here at Strategic,” said Rao.

Strategic Financial Services is an independent financial advisory firm that manages assets for individuals, businesses, and not-for-profit organizations. Areas of expertise include asset management, financial planning, and company sponsored retirement plans.

Company headquarters are located at 114 Business Park Drive, Utica, New York with additional offices in Syracuse, NY and West Palm Beach, Florida. For more information call 315.724.1776 or visit us at www.investstrategic.com.

Please contact Andrew Thurston at 315.724.1776 for additional information or interview availability.

Strategy Snapshot - Q2 2011

Mon, 23 May 2011 15:57:54 -0400

The Emerging Consumer

Our inaugural Strategy Snapshot explored the role of the emerging markets within the international economic and investment ecosystem. In this edition, we narrow our focus to take a more in-depth look at the evolving nature of the global consumer and the impact of related themes on Strategic’s portfolio decisions.

We believe that the citizens of the world’s emerging economies are growing more confident in their future. The most populous nations on earth are ushering in an era of job and income growth that will empower a new consumer class around the globe. Economies once seen as the low-cost producers of the world’s goods will transition into valuable end markets coveted by multinational corporations. We expect this trend to drive earnings and stock performances for years to come. Consider the following chart:

Country/Region	Per Capital GDP	GDP (USD Trillions)	Population	GDP Growth Rate (2012 Estimate)	Gross National Savings (% of GDP)
(Developed)
Euro Area	$49,000	$16.3	330,000,000	1.3%	19%
United States	$48,000	$14.7	310,000,000	2.9%	11%
Japan	$44,000	$5.5	125,000,000	2.1%	23%
(Emerging)
Russia	$10,700	$1.5	140,000,000	4.5%	25%
Brazil	$10,500	$2.1	200,000,000	4.1%	16%
Mexico	$9,100	$1.0	110,000,000	4.0%	25%
China	$4,200	$5.9	1,400,000,000	9.5%	54%
Indonesia	$2,900	$0.7	240,000,000	6.5%	33%
India	$1,200	$1.5	1,250,000,000	7.8%	34%
Source: World Bank and International Monetary Fund

At the risk of stating the obvious, we observe higher growth rates off of lower GDP bases throughout the emerging world. The sheer population numbers are also a big part of the story. The market potential of the emerging consumer is enormous, beyond the size of any that has come before it. In addition, wages are rapidly rising. Per capita GDP in the emerging world, while still paltry by Western standards, is entering a range that will, for the first
time, allow for real growth in discretionary spending. Lastly, responsible private and public fiscal policy has provided the emerging world with an abundance of potential spending power, this while the traditional driver of global consumption is showing signs of fatigue.

The US Consumer: Passing the Baton

The United States’ consumer accounted for approximately 15% of global GDP in 2010. It is a burden too big to bear for much longer, especially when taken in the context of longstanding domestic issues.

Simply put, the US consumer is increasingly tapped out. According to the Nielsen Company, many Americans, 32% in fact, report that they do not have any spare cash for discretionary expenditures or savings, an incredibly high number considering our relative economic advantages. In contrast, and despite drastically lower levels of income, only 4% of Indian citizens claim the same hardship. We have spent too much for too long, leaving less fuel for
growth as compared to our emerging world counterparts. A growing share of our national resources is going toward debt service and, within consumer expenditure, health care. In short, the fuel for consumption in the emerging markets is abundant at a time when the traditional leader of economic growth is more than ready to share the stage. The global consumer market is moving beyond the shores of the United States to become an international story with powerful long-term catalysts, offering a much needed respite for the United States. We are more than pleased to see domestic consumption deemphasized, and thrift popularized, after a decades long, debt-fueled, spending binge. Let the healing begin.

The Global Consumer: Keeping up with the Joneses...I mean the 攀比

The emerging consumer will be discerning in the deployment of newfound discretionary funds. Growing levels of sophistication, a taste for perceived quality, and a want for an improved lifestyle will drive buying patterns. Western brands will often be favored over local counterparts. Established global products and niche local providers will be among the leading beneficiaries as this aspirational consumer redefines the global market.

Stock Selection: Great story. But what is the play?

When applying a thematic narrative to security analysis, we want to be certain to consider multiple perspectives. While the long-term theme may be terrific, company fundamentals within the current macroeconomic environment will define stock performance in the intermediate term. At present, we view stocks as fairly valued, but not inexpensive. The easy money has been made. Developed market GDP growth forecasts are beginning to tack lower while the emerging markets remain on more solid footing. In short, smart stock picking, cautious optimism and geographic diversity are the orders of the day.

Company Spotlight I: Proctor & Gamble

We returned to a former holding in Procter & Gamble (PG). The move is primarily sector-related as we seek to increase our exposure to the consumer staples space. We regard P&G as a defensive play with potential upside catalysts. The company is repositioning itself to be more competitive, and is aggressively expanding its exposure to the emerging market consumer. The yield is an attractive 3.2%.
Purchase date: April 15, 2011.

Company Spotlight II: Ctrip.com International

Ctrip.com International (CTRP) is the leading consolidator of travel services in mainland China, with a dominant online presence. Ctrip, with well-established alliances and an exceptional
reputation for customer service, is positioned for growth amid fast-rising demand for business and leisure travel in China. Management has demonstrated deep understanding of its home markets and has consistently identified new growth drivers. The balance sheet is solid, and valuation, given growth prospects, is undemanding.
Purchase date: April 1, 2011.

Firm Update: New Team Member

Andy Thurston has joined Strategic to lead our Business Development and Marketing efforts from the firm’s Saratoga Springs location. Andy graduated Magna Cum Laude from the accounting program at Siena College and comes to us now from The Ayco Company L.P., a Goldman Sachs Company, where he worked as a financial analyst. Andy is pursuing his CFA charter as a Level II candidate for the June 2011 exam.

As always, we welcome your questions and comments.
The Investment Management Team
1.800.937.4461 | www.investstrategic.com

Strategic Financial Services, founded in 1979, is an independent investment firm currently managing and advising clients on assets in excess of $1 billion. Strategic has offices in Syracuse NY, Saratoga Springs NY, Utica NY and West Palm Beach FL. The securities identified and described do not represent all of the securities purchased, sold or recommended for client accounts. The reader should not assume that an investment in the securities identified was or will be profitable. A complete list of Strategic’s stock recommendations for the preceding 12 months will be presented upon request. Future performance can never be guaranteed.

Strategy Snapshot - Q1 2011

Mon, 14 Feb 2011 15:58:10 -0500

Global Economic Share is Shifting...Rapidly

As a complement to our Quarterly Market Commentary, the following discussion is the first in a regular series of updates highlighting key themes and activity emanating from Strategic’s investment team.

While the secular trend of emerging market economic growth certainly comes as no surprise, the speed and magnitude of the shift over the past seven years, as illustrated below, is truly impressive.

Setting the Stage

Several key determinants are crucial to the foundation of a sustainable growth story in a developing nation. The most prominent of these factors are higher education, increased life expectancy, low fertility rates, limited government consumption, controlled inflation, openness in trade and rule of law.¹ At the onset of the 21st century, a more stable political environment in what became the lead emerging markets allowed these growth factors to flourish. Additionally, an inexpensive supply of human capital, and in many cases, natural resources, stood at the ready.

The stage was set for an economic and investment boom. Foreign capital seeking exposure to this emerging growth phenomenon followed, and market participants were not disappointed. Over the past 10 years, the MSCI Emerging Market Index has produced an annualized return of 11.4%, far outpacing the returns of the developed markets. Is there room for still more growth? We believe so.

Act II

As a proxy for the emerging markets, Brazil, Russia, India and China, the namesake ‘BRICs’, are forecasted to see annual GDP expansion in the neighborhood of 8.5% over the next two years. Other emerging and less publicized countries are also likely to see substantial growth. Turkey (5%), Poland (4%), Singapore (6%), Indonesia (6%) and Chile (6%) are among the leaders. In total and with such an aggressive growth rate, the emerging markets should account for approximately 50% of world GDP by 2025.² The most significant challenge will likely come in the form of monetary policy and the need to control inflation. China’s recent interest rate hikes have provided proactive leadership on this front.

The rise of the emerging market middle class consumer will be the primary driver for this next phase of growth. In addition, consumer and public sector balance sheets are in far better shape than their developed counterparts. As an example, the United States carries a public sector debt load of 92% of GDP. In contrast, China stands at 19% and India at 50%. In short, and despite the inevitable short-term flare-ups (Egypt and Tunisia, most recently), the leading emerging market economies are well-positioned for a second leg of sustainable, organic economic growth.

What’s an Investor to Do?

The issue for investors becomes whether the market has properly discounted this growth potential in the form of efficiently priced securities. While the gap between intrinsic value and stock prices has certainly narrowed, Strategic believes significant investment opportunities still exist. In fact, emerging markets account for only 11% of the global equity universe, despite their increasing share of world GDP. This disconnect should narrow in time.

In order to help manage the inevitable bouts of short-term volatility, properly positioned strategies will approach the emerging markets within the context of a well-diversified portfolio. We favor direct market exposure using an exchange-traded-fund (ETF). Low expenses, minimal tracking error, geographic diversity, and investment flexibility drive our thinking. As a complement to direct investment, we also seek developed economy corporations with significant earnings exposure to the emerging markets.

Single Stock Highlight I: Equity Income Strategy

We bought Tupperware Brands (TUP), a mid-sized household and beauty goods company that utilizes a direct sales model through its global sales force of 2.4 million people. We favor the company’s strong international exposure; approximately 90% of its revenue is generated outside the U.S. In addition, more than half of sales come from emerging markets, where direct selling gives Tupperware a key advantage, due to the relative lack of retail infrastructure in developing consumer markets. The stock was yielding 2.5%, and valuation, given growth prospects, is attractive.
Purchase date: November 17, 2010

Single Stock Highlight II: Quality Core Strategy

We took the opportunity afforded by short-term price weakness and repurchased Emerson Electric (EMR). The company is an industrial conglomerate operating in the process automation, network power systems and climate control businesses. With 50% of revenues coming from outside the United States, and boasting an enviable presence in the emerging markets, Emerson is well-positioned to benefit from global economic growth. We also favor the company’s highly regarded management team and results-oriented operating culture. Valuation, at purchase, was reasonable.
Purchase date: November 2, 2010.

Firm Update: New Team Member

We are pleased to welcome Vinayak Rao to the Investment Management Team as an equity analyst. “V” comes to Strategic from India’s Delhi College of Engineering and Duke University’s Fuqua School of Business. He is currently preparing for Level III of the CFA program. Vinayak will focus on single security analysis and the development of a Small/Mid-Cap equity strategy.

As always, we welcome your questions and comments.
Strategic Financial Services
Investment Management Team
1.800.937.4461 | www.investstrategic.com

Strategic Financial Services, founded in 1979, is an independent investment firm currently managing and advising clients on assets in excess of $900 million. Strategic has offices in Syracuse NY, Saratoga Springs NY, Utica NY and West Palm Beach FL. The securities identified and described do not represent all of the securities purchased, sold or recommended for client accounts. The reader should not assume that an investment in the securities identified was or will be profitable. A complete list of Strategic’s stock recommendations for the preceding 12 months will be presented upon request. Future performance can never be guaranteed.

blog

Strategic Insights (May 7-11): "The Great Wall (Of Worry)"

Strategic Insights (April 30 - May 4): "Growth - A Muddy Track"

Press Release - Clinton Kane Joins the Strategic Team

Press Release - Michael Leist Joins the Strategic Team

Strategic's Laura Hailston In The News

In The News - Strategic Selected as a CNY Business Journal Panelist

Disclosure:

Strategy Snapshot - Q4 2011

In The News - SUNYIT honors alumna Iris Buczkowski for planned gift

Press Release - Aaron Evans Joins the Strategic Team

In The News - Strategic is a Proud Supporter of 26th Annual ARC Gala

In The News - Strategic is a Proud Supporter of The Leatherstocking Ballet

Press Release - Traci Grogan Joins the Strategic Client Support Team

Press Release - Michael McGraw Joins the Strategic Client Support Team

In The News - Strategic Selected as a CNY Business Journal Panelist

Press Release - Robert Hanft Joins the Strategic Investment Team

Press Release - Strategic’s Thurston Passes Level II of the CFA Program

Press Release - David Lemire, CFA Joins the Strategic Team

Press Release - Strategic’s Rao Passes Level III of the CFA Program

Strategy Snapshot - Q2 2011

Strategy Snapshot - Q1 2011

¹Barro, Robert J. 1997. Determinants of Economic Growth: A Cross-Country Empirical Study. MIT Press: Cambridge, MA.

²International Monetary Fund