To Clients: Happy holidays, looking ahead to a bright 2004

(December 2003) Wish your clients the best for the holiday season, re-emphasize the importance of investing for the long term and remind them that it’s time to review their portfolios with you — all with this one customizable letter!

Dear [Client’s name],

With the year drawing to a rapid close (as they always seem to do!), I want to wish you and your family the very best for the holiday season and for the upcoming New Year.

Speaking of years, what a difference one can make. Last year at this time, terrorism, corporate scandals and weak markets weighed on everyone’s mind, along with the looming threat of a U.S.-led war on Iraq. While we are still processing the aftermath of this war along with continuing corporate scandals (some closer to home than others), some stability has crept back into our lives amid encouraging signs that 2004 is going to be a bright year on several fronts, indeed.

As I write this note in mid-December, the TSX Composite index is up over 20% for the year. The Dow Jones Industrial Average, home of 30 blue-chip U.S. stocks, is also up about 20% on the year, while the more broadly-based S&P 500 Index (often referred to as the “barometer” for U.S. stocks) has climbed almost 22% in 2003. The technology-laden NASDAQ has soared over 45% this year. So, for the first time in four years, major North American indexes will be finishing well entrenched in positive territory.

Outlooks for the U.S. and Canadian economies are also very healthy. Bank of Montreal economists recently forecast Canadian growth to average 3.3% in 2004 (it was a sluggish 2% in the third quarter of 2003), while pegging U.S. growth — depending on business confidence — at 4.4%, as the effects of recent tax cuts kick in.

Despite indications that the stock market and North American economies are gearing up for a strong 2004, it would be naïve to suggest that you will never feel turbulence again, whether it’s next month, next year or five years from now. Investing is a long-term proposition and the reason why we have diversified your portfolio the way we have is to smooth out the ride. You may not hit the highest of the high returns, but you are also protected from plunging too low when — and that’s “when,” not “if” — the next market downturn happens.

Making sure your portfolio is still soundly aligned with your risk profile and long-term goals is always prudent in any type of market, which is why I will be calling you within the next few weeks to set up a meeting to review your investments and your overall financial plan. In the meantime, as always, if you have any questions about any element of your financial plan, please do not hesitate to call me at the number below.

Please enjoy this magical time of the year with your family and friends. Thank you for your trust and confidence in 2003, and here’s to a peaceful and prosperous 2004!

Warm regards,

[Your signature]

[Your name]

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.