Market Review and Outlook 4th Quarter 2005
The most remarkable fact about the fixed-income markets for 2005 is that, despite a 200 basis point increase in the Fed Funds rate, from 2.25% to 4.25%, virtually all sectors of the fixed income markets – both taxable and tax-exempt – showed positive returns. These returns may not have been especially robust, but they were competitive with some major stock indices, such as the DJIA and NASDAQ 100. Throughout this period of low interest rates, Samson has worked to protect portfolios’ principal and flexibility to be in a position to enjoy higher returns when rates peak. We believe that returns in 2006 will be better than those of 2005, in part because 2005 ended with short and intermediate-dated interest rates significantly higher than where they began the year.