Smoke Signals 3
MAY 15,2011
General Council briefed on Tribal investments
Improving economy
translates into more
valuable portfolio
By Dean Rhodes
Smoke Signals editor
After the stormy economic times
of 2008, when UBS Financial Ser
vices' Senior Vice President-Investments
Mark Barnum reported to
the general membership that Tribal
investments had plummeted more
than 25 percent in value, things
have been better for the second
year in a row.
And Barnum reflected those
rosier economic times at the May
1 General Council meeting held in
Grand Ronde.
"It's a beautiful day outside," Bar
num said jovially about the sunny
spring morning,
"and that is a re
flection of how the
investment mar
kets are doing."
For the second
consecutive year,
Barnum reported
that the Tribe's in
vestment portfo
lio had increased
by double-digits in
value. Although
2010's 10.69 rate of growth did
not match 2009's 16.37 percent, it
is going in the right direction at a
healthy pace.
UBS Financial has been the
Tribe's investment adviser since
2001 and helped Tribal leaders and
employees increase the value of the
Tribe's portfolio by more than 300
percent in those 1 1 years, he said.
Barnum said that 2011 will, in all
likelihood, continue to see recovery
in the financial markets and Tribal
members should expect a 7 percent
to 10 percent growth rate in Tribal
investments when he stands before
them in 2012.
The current Tribal portfolio, Bar
num said, is split with 46 percent
invested in bonds, 42 percent in
stocks and 10 percent in money
market funds.
Barnum said UBS expects
growth in the U.S. economy to
be moderate, but sustainable.
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Photos by Michelle Alaimo
Mark Barnum, senior vie president-investments with UBS Financial Sarvicas,
gava tha Ganaral Mambarship an updata on Tribal invastmants during tha Ganaral
Council maating at tha Tribal Community Cantar on May 1.
Tribal member Debbie Barnando asks
Mark Barnum, senior vice president
investments with UBS Financial
Services, how Tribal investments have
been diversified from 2008 during the
General Council meeting.
UBS forecasts say there is a 60
percent chance of continued moder
ate recovery in the economy, a 20
percent chance of a strong recovery
and only a 20 percent chance of
either stagflation or a new down
turn. However, the memories of the
2008 recession remain fresh in the
minds of Tribal members.
Tribal member Ann Lewis asked
if the Tribe has developed a "stop
sale point," which would be a point
at which the Tribe would get out of
the stock market if another drastic
decline occurred.
Barnum, like he has at other
General Council meetings, warned
against trying to time the stock
market.
"There are two decisions that
need to be made: when to sell and
when to buy back in," he said.
"Those two decisions are usually
made at the wrong times."
However, Barnum cited changes
that have occurred that will give
the Tribe more flexibility.
Tribal returns
According to Mark Barnum,
senior vice president-investments
of UBS Institutional
Consulting, the returns on in
vestment of the Tribal portfolio
since 2002 have been:
2002: -1.67 percent
2003: 14.24 percent
2004: 6.92 percent
2005: 4.34 percent
2006: 9.47 percent
2007: 5.59 percent
2008: -25.64 percent
2009: 16.37 percent
2010: 10.69 percent
"We have a positive view on risk
assets," he said. "This is not a
time to put your money under the
mattress."
Community Input meeting held May 1
Participants discuss Tribal
services, economic development
By Kim Rogers
Tribal Planning & Grants manager
Following the May 1 Gen
eral Council meeting, the Tribe
held its 2011 Community Input
meeting in the Tribal gym in
Grand Ronde.
Thirty-one people attended,
including six Tribal Council
members and five assigned
staff.
The Tribe uses Community
Input meetings for planning
and grants, such as Indian
Community Development Block
and Administration for Native
Americans grants.
The meeting started with a
brief overview regarding recent
community development activi
ties, current projects and proj
ects planned for 2011.
One end of the Tribal gym
featured banners highlighting
the 1985 Reservation Plan and
the 1995 and 2010 Strategic
Plans, and several banners
highlighted time periods from
the original reservation, Ter
mination, Restoration and then
development every five years
thereafter, including land ac
quisition maps, total Tribal
membership and photos of de
velopment projects.
After the presentation, Tribal
members broke into discussion
groups on Tribal services and
economic development. Sug
gestions from the two groups
focused on improved recre
ational activities and facilities
for youth and the community.
The need for transition ser
vices and counseling for Tribal
members and for improved
services for Elders also were
expressed.
Economic interests included
economic diversification, a gro
cery store and interest in using
Tribal lands to grow or raise
food for use at Spirit Mountain
Casino.
Only one Community Input
meeting was held this year be
cause of budget constraints.
He said minor's accounts have
been restructured, giving par
ents or guardians the ability
to control how the money is in
vested. In addition, as a Tribal
minor gets older, funds placed
in the default option are moved
to increasingly conservative
investments to prevent a sud
den drop in value as the youth
comes of age. Barnum said most
minor's accounts went to the
default investment option.
And, Barnum said, a new tac
tical asset allocation manager
has been added to ensure that
Tribal investments are pro
tected in the event of another
global economic meltdown.
Tribal member Debbie Ber
nando asked about how Tribal
investments have been diversi
fied since 2008.
Again, Barnum pointed to the
new tactical asset allocation model.
"The risk is less without compro
mising the rate of return," he said,
adding there is more diversification
in the Tribe's stock holdings. "The
lesson learned from 2008 was to be
more flexible."
Tribal Council member Wink So
derberg asked about the economic
influence of China and its effect on
the United States.
Barnum said that high U.S.
unemployment and increased sav
ings rates are actually hurting the
Chinese economy since Americans
have less money with which to pur
chase consumer goods.
"It is market-driven," Barnum
said. "There is incentive for every
one to keep this consumption drive
going."
Barnum also reassured Tribal
Council member Steve Bobb Sr.,
who inquired about what effects
the disasters in Japan might have
on the world economy.
Ironically, Barnum said, the
tragic earthquakes and tsunami
might actually energize the Japa
nese economy, which he said has
been "going sideways" for years.
Increased governmental spending
on repairing disaster damage might
energize the Japanese economy,
he said.
Barnum said a bigger concern
is the price of gasoline, but UBS
expects that to level off soon and
not be too much of a drag on the
economy.
In other action, it was announced
that Tribal Council nominations
will be accepted at 11 a.m. Sunday,
June 26, in the Tribal Community
Center and the next General Coun
cil meeting will be held Sunday,
Sept. 11.
Tribal Chairwoman Cheryle A.
Kennedy said that she will travel
to Washington, D.C., during the
week of May 2-6 to testify before
Congress on the funding needs of
Native American Tribes and the
Grand Ronde peoples.
She said she would concentrate
on health, public safety, education
and contract support costs in her
congressional testimony.
Tribal member Paul Johnson
won the $100 door prize while the
$50 door prizes were won by Tribal
Elders Duane Wheeler, Theresa
Haller and Wayne Peters. B