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Monday morning, September 15, 2008 -
Volatility in the financial markets has been the headline news all weekend. Like many of you, we are concerned with the implications for the ongoing financial health of our country. Closer to home, all of us are concerned about our family's financial future and the security of the institutions in which we invest. We want each of you to know that we have been meeting on a daily basis with our portfolio manager, AQS Asset Management, to know and understand the status of our investment portfolio and more important, the impact of events not yet reported by the rating agencies and the media.
We are happy to report that we subscribe to a policy of broad portfolio diversification. As of today, September 15, 2008, our investment in any single US corporation is less than 1%. Our exposure to agency debt (recently reaffirmed at Aaa/AAA) is less than 6%. Agency guaranteed mortgage securities (also reaffirmed at Aaa/AAA) make up less than 40% of our portfolio. Our portfolio holds fixed income securities from 213 unique issuers. Over 95% of our portfolio is senior level.
All of these safeguards have been consciously developed over time; some of our own experience, some from the experience of others. Experience of others, still more simply because they make sense:
"It's not the return on principal but also the return of principal." - Will Rogers
The downside to broad diversification is that we will have small investments in literally hundreds of companies. This increases the probability that we will realize some losses. This is where our surplus comes in. Our surplus as of June 30, 2008 was in excess of $7.4 million. Surplus allows our company to weather financial upheaval. Mandated by regulators and calculated at least quarterly in our financial statement, our surplus speaks to our ability to make good on the policies you hold. They are the promises we keep.
We recently visited Washington, DC for the annual meeting of the National Fraternal Congress of America and to meet with our elected representatives. We had a chance to visit the World War II memorial while we were there. If you have never had a chance to visit the site, we recommend it. If you have visited the site, you know it sits with the Lincoln Memorial to the west and the Washington Monument to the east - a grand testimonial to a great struggle. We were reminded of a quote:
"A good plan, executed now, is better than a great plan executed next week." - General George S. Patton.
NSS has a great plan. We've stuck with it and it has served us well.
Should you wish to further explore our most recent financial filings, we would direct you to the National Association of Insurance Commissioners (NAIC) web site. Click here to get more information about the National Slovak Society: About the National Slovak Society |
