Kovitz Investment Group Q4 letter to shareholders.
This quarterly installment of our investment commentary follows a Question and Answer format. We attempted to include a wide range of issues, from our equity performance to our thoughts on risk, as well as a discussion of various aspects of our investment philosophy. We tried to address what we’d want to hear about and what questions we’d want answered if our positions were reversed. If we left out a question you would have liked answered, please contact your Kovitz Investment Group (KIG) advisor and we will do our best to respond.
Q. How did the KIG equity composite perform in the final quarter of 2013? KIG. For the quarter ended December 31, 2013, the KIG Equity Composite (the Composite) increased in value by 9.9%, while our primary benchmark, the S&P 500, increased 10.5% over the same period.
Q. And how about for the full year?
KIG. For all of 2013, the Composite increased 32.7%, which was slightly better than the 32.4% increase exhibited by the S&P 500. While we are thrilled with these strong absolute results, we’d like to remind everyone that our style doesn’t typically lead to outperformance during periods of broad market gains. In a significantly rising market, we are more than content to be average, knowing that our management approach is better suited to outperform in down markets. Our goal is for the value of our clients’ holdings to consistently decline less than the overall market when the market declines while participating fully, but not necessarily more so, when the market rises.
Please understand that although we know there is an interest in how our clients perform over the short time periods mentioned (and yes, we believe even one full year is considered short) and are happy to present it in order to be fully transparent, it is just not something on which we focus. We are of the belief that being preoccupied with short-term outcomes will not lead to above average long-term results.
See Full PDF here: Kovitz-Newsletter-2014-Winter