Fairport in Fifteen April 5, 2012
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J.T. Mullen is the Chief Investment Strategist at Fairport Asset Management, bringing over 30 years of experience. Previously, he was the Chief Financial Officer at The Cleveland Foundation for 23 years, growing their endowment from $400 million to $1.8 billion. John Silvis is the Director of Investments at Fairport and oversees the research team and investment decisions. Richard D'Amico is the Manager of Investments and oversees fixed income models and alternative investments.
Fairport in Fifteen April 5, 2012
- 1. Fairport in Fifteen Audio recorded on April 5th, 2012
- 2. J.T. Mullen Chief Investment Strategist J. T. Mullen joined Fairport Asset Management in 2011, bringing more than 30 years of experience as a highly regarded investment and finance professional. As Chief Investment Strategist, J.T. provides leadership and strategic oversight to Fairport‟s Investment Committee. J.T. is widely known in the investment community as a creative problem solver, superb listener and effective leader. Among other accolades, he was named „Chief Financial Officer of the Year‟ in 2007 for charitable organizations by Crain’s Cleveland Business. Prior to joining Fairport, J.T. was Senior Vice President and Chief Financial Officer at The Cleveland Foundation, the second largest community foundation in the country. During his 23 year tenure, he crafted an investment philosophy that led to substantial growth of the foundation's endowment – from $400 million to $1.8 billion. As Chief Financial Officer, he was responsible for managing both the Foundation's investments and its internal financial function. J.T. joined the Cleveland Foundation in 1987 as Controller and was named Chief Financial Officer five years later. He retired from the Foundation in 2010. Earlier in his career, J.T. was a manager with Arthur Young & Company and also with the Cuyahoga County Board of Commissioners. He holds a B.S. in Business Administration from Cleveland State University. Throughout his career, J.T. has been actively involved as an advisor, board member and volunteer for local and national nonprofit organizations. He served on several highly visible national committees addressing community foundation issues, such as investment practices, accounting standards, and alliances with the marketing, technology and financial services industries. He currently serves on the investment committees of United Way of Greater Cleveland, the Catholic Diocese of Cleveland Foundation and CSA Health Systems. J.T. and his wife, Mary, are the proud parents of five children and four grandchildren. An avid sports fan, J.T. follows many teams and players with a statistical acumen that is impressive. He also enjoys playing golf and reading.
- 3. John M. Silvis, CFA Director of Investments John Silvis, a CFA charterholder, serves as Fairport Asset Management‟s Director of Investments. As such, John oversees the research of the Investment Team, determines the asset allocation of Fairport‟s model portfolios and directs investment decisions and implementation on a day-to-day basis. John provides clients, prospects and internal staff with guidance about Fairport‟s investment philosophy, process and performance. John brings over 15 years of experience to the Investment Team and has been with the firm since 2000. Prior to Fairport, he was a Portfolio Manager at National City Bank. John began his career at Mellon Bank. John obtained his B.A. in Economics at Penn State and his MBA at Baldwin Wallace College. He is a member of the CFA Institute, as well as the CFA Society of Cleveland. John lives in Strongsville with his wife Lori and has three children. Richard D’Amico, CFA Manager of Investments Richard D‟Amico, a CFA charterholder, serves as Fairport Asset Management‟s Manager of Investments. In this role, he oversees the implementation of the firm‟s fixed income models and is responsible for the review and oversight of Fairport‟s alternative investments and strategies. Rick brings over 10 years of experience to the Investment Team and has been with the firm since the summer of 2009. Rick most recently served as a market risk review analyst at KeyBank. Prior to KeyBank, he worked as a licensed equity research analyst at Great Lakes Capital Partners, LTD, covering regional bank and thrift companies. He is a graduate of Mount Union College where he obtained his B.A. in Business Administration with a Finance concentration. He is also a member of the CFA Institute, as well as the CFA Society of Cleveland. Rick lives in Rocky River with his wife Shannon and son. In his free time, he enjoys playing baseball and spending time outdoors.
- 4. Market and Economic Commentary • The U.S. economy continues to expand in 2012 with GDP growth likely over 2% for the first quarter and the rest of the year. Current expansion is self-sustaining but lacks a clear catalyst. • Global growth remains positive but bifurcated, aided by growth in the emerging markets. China will likely execute another “soft landing”. • Europe remains the biggest concern for 2012. The austerity measures are pushing the Eurozone into a recession, need to focus on growth going forward. Major structural reforms are still needed. • Weekly unemployment claims continue to trend lower and the unemployment rate dropped to 8.2%. Consumer confidence has rebounded. • Monetary policy remains accommodative as the Federal Reserve is committed to keeping interest rates low until the end of 2014. More quantitative easing possible. • 2012 saw the best first quarter for equities since 1998. Fundamental outlook for equities remains positive as multiples remain attractive. Corporate earnings should continue to grow in 2012 albeit at a lower rate. • Maintaining an overweight in Technology and Industrials to benefit from global growth. Remain underweighted in Financials and Utilities. • Small and Mid Caps are rebounding in 2012 due to increased productivity, stable labor costs and improving credit environment. • Higher gasoline prices could be a drag on growth going forward as wage growth remain stagnant. 2012 could be the year housing prices find a bottom. • Treasury yields remain low due to global uncertainty. Continue to underweight Treasuries in favor of investment grade corporate bonds.
- 7. Source: Standard & Poor’s, Moody’s, FactSet, J.P. Morgan Asset Management. Data are as of 3/31/12.
- 8. Source: Standard & Poor’s, Compustat, BEA, FactSet, J.P. Morgan Asset Management. Data are as of 3/31/12.
- 11. Sources: (Top) Census Bureau, J.P. Morgan Asset Management. Monthly mortgage payment assumes a 20% down payment at prevailing 30-year fixed-rate mortgage rates; analysis based on median asking rent and median mortgage payment based on asking price. *1Q12 estimates provided by J.P. Morgan Asset Management. (Bottom) Census Bureau, National Association of Realtors, J.P. Morgan Asset Management. Home sales include both new and existing home sales. Existing home sales include single-family, townhouses, condominiums and co-ops. Data reflect most recently available as of 3/31/12.
- 12. Source: BLS, J.P. Morgan Asset Management. Data are as of 3/31/12.
- 13. Fixed Income Sector Returns
- 14. Source: U.S. Treasury, J.P. Morgan, J.P. Morgan Asset Management. Default rates are defined as the par value percentage of the total market trading at or below 50% of par value and include any Chapter 11 filing , prepackaged filing or missed interest payments. Data are as of 3/31/12.
- 15. Source: J.P. Morgan Global Economics Research, J.P. Morgan Asset Management. Emerging and Developed Economy GDP growth and real policy rates represent GDP weighted aggregates estimates by J.P. Morgan Global Economics Research. Data are as of 3/31/12.
- 17. Senior Relationship Team Paul Abbey Heather Ettinger Ken Coleman Chris Isabella, CPA/PFS Andrew Connors, CFP® Tom Seifert, CPA/PFS Pete DeVito, CPA, CFP® Emily Shacklett, CPA/PFS Emily Drake, CFP®
- 18. Disclosures This Fairport in Fifteen presentation is for informational purposes only and should not be relied upon as research or investment advice. It should not be considered as a solicitation or recommendation by Fairport to buy, sell or continue to hold securities or other investments. Past performance is not a guarantee of future results, and is not indicative of any specific investment. It should not be assumed that the investment process and strategy discussed herein has been or will prove to be profitable. Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets. Audio recorded on April 5th, 2012.