Our portfolio enjoyed very strong third quarter results in both absolute and relative terms, bringing year to date returns slightly ahead of the S&P 500.   While no one should focus on short term investment results, it’s amazing what a difference a quarter can make.  The performance was relatively broad based across the portfolio, with notable strength in health care, consumer discretionary, and industrial related positions.

Our goal is to outperform our primary benchmarks over a full market cycle, which has typically meant five or more years.  We have achieved this objective on a long term, net of fees basis, but it has proven a more difficult feat in recent periods given the prolonged, stop and start nature of the recovery and an obsessive investor focus on Fed policy in the absence of more convincing economic fundamentals.

While Fed policy has held unusual sway over the markets in recent years, over the long run earnings matter most to the direction and level of the stock market and on that front, the future looks bright.  For our thoughts on the portfolio and where we believe we head from here, please read our Third Quarter 2014 Performance Commentary.