"We Invite You To Join Our Fraternal Family"
|
|
|
A Message from the Executive Officers
|
 |
| |
September 29, 2008 -
In keeping with the desire to keep our members informed as to the impact of the current market turmoil, we wish to update our last correspondence posted on our web site.
News of the Lehman bankruptcy, and the seizure of Washington Mutual last week, underscores the severity of the stresses on our financial system. Lawmakers in Washington have been debating legislation to support the financial system since the middle of last week. The markets have swung wildly with each bit of news from the negotiations in Washington.
But in McMurray, Pennsylvania, the NSS portfolio is performing according to plan. It isn't that we are immune to the volatility of Wall Street, we simply choose not to participate in that volatility. About five years ago, we developed a risk management plan that stresses the importance of diversification to address credit risk as well as structure to deal with interest rate risk. Credit risk, simply put, is the risk that the companies in which we invest will declare bankruptcy. Interest rate risk is the risk that rates will rise or fall rapidly (remember the 80's?) thereby disrupting cash flow. We already have in place the risk management measures to deal with both.
NSS has a great risk management plan. We've been actively managing our portfolio according to this plan since 2003. We don't try to outguess or outsmart the markets - we can't. Wall Street is littered with the most recent 'smartest guy in the room' that turns out, wasn't so smart after all. We've also established safeguards in our investment plan for events that may never happen at all.
Because our portfolio is diversified among literally hundreds of companies, we have small exposure to almost every company you may have heard of. So while the Lehman and Washington Mutual failures had an impact on our investments, it is very small. If our earnings for the second half of the year stay on track with the first half, our surplus will continue to grow despite a financial market that is truly a once in a lifetime event.
Rest assured that we treat your money as if it was our own. We like to go to bed each evening knowing that our investments (your money) are safe and secure.
Click Here to view our Previous Message: Statement of Portfolio Condition
|
|
|
| 
