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Navellier is the type of fund that does poorly as the economy
drifts from one business cycle to another. For example, as
we emerge from recession into recovery, Navellier will flounder.
However, when the economy is securely in recovery mode, Navellier
will put together outstanding results. Since the economy is
currently transitioning from recession to recovery, it may
take several quarters for Navellier to generate consistent
returns.
So here is our quagmire. Navellier is performing below all
three performance guidelines shown above, and has done so
for three consecutive quarters. However, when this occurred
in the past, Navellier soon recovered and produced exceptional
investment returns. If we continue to wait, Navellier may
not recover and the investment returns of the participants
will be adversely affected. The Committee is at a crossroads.
We decided to wait another quarter for any potential action.
In the meantime, the Committee felt that communications with
the plan participants would be prudent, just so that each
person understands the gravity of the situation. As a suggestion,
the Committee feels that diversifying a portion of your holdings
away from the Navellier Fund might be prudent. The Franklin
Small Cap Growth Fund, which has the same risk makeup as Navellier
but produced a 24% jump in the 4th quarter of 2001, is a logical
choice but by no means the only one.
If you do wish to switch from the Navellier Fund, you may
do so yourself by logging on at www.schwabplan.com
and changing your investment elections. You may also call
Chris Renner or Katrina Tange at MedAmerica Financial
Services at (800) 842-2808.
We will continue to keep all participants informed of any
future action we may take on the Navellier Fund. The Committee
meets again in late May.
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