If you ask native Chicagoan Ed Gocher how frequently he gets out fishing, his answer is, "As often as possible." Not really an unusual response from someone who lives on the Manatee River and loves fishing, unless you consider that his business, Miller Electric, has quadrupled in the six years he and his wife Sue have owned it, expanding their staff from two to 10.

Finding time to fish is Gocher’s only problem these days. Miller Electric’s business has grown so much that they required more space and recently purchased a 3,000 square foot building to accommodate their experienced and long-term personnel, including Gator, Miller’s mascot. Their new shop is spacious and organized with vehicles that all look like they just pulled out of the showroom.

Miller Electric is state certified as a full service repair, renovation and new construction electric company servicing all of Bradenton, Sarasota, Longboat Key, Siesta Key and Anna Maria Island. Although it handles all types of electrical repairs and hookups, it specializes in boat lifts and boat lift remotes, dock lighting, including deep glow underwater lighting, snook lights and pool lights. It also installs and gives complimentary advice on friendly sea turtle lighting for beachfront properties on the islands during turtle season, May 1 through Oct. 31. It counts many condominium associations and real estate rental companies, in addition to individual home owners and local contractors, as its clients.

Miller Electric was winner of the 2008 Anna Maria Island Chamber award for best mid-sized business and was nominated by the Longboat Key Chamber in the category of best small business. The Gochers are community minded and donate the wiring for Anna Maria Island’s annual Bayfest festival as well as for the Friday night Music Fests and the AMI Chamber of Commerce holiday tree. In addition, Ed Gocher volunteers on the advisory board for the Manatee Technical Institute and is also involved in his sons’ sports activities, having coached over 700 games for Tyler and Adam.

Sue and Ed Gocher run a successful family business where their sons are involved and they treat their employees as family. One of the top services they offer is a live person on the other end of the phone when you call.

Whether you need to change the light switch in your bedroom, hook-up a new air conditioning system this summer or install landscape lighting, Miller Electric is prepared to work with you on your specific needs. When Ed Gocher isn’t fishing or volunteering, he’s running his growing business along with his family and loyal staff, and of course, his four-pawed pal, Gator.

Miller Electric

6992 Iris St., Sarasota, Fla. 34243

941-747-1530
941-383-1008
(Longboat Key)
www.MillerElectricFL.com
Visa/MasterCard

History has shown that when most investors are doubtful or fearful, seeking safety is the wrong thing to do because the fears of these investors are caused by price declines which have usually already occurred. Presently, while the critical point of the recent credit market crisis appears to have passed, many investors are still in a state of shock and having trouble seeing themselves own any investment without some sort of guarantee.

Unfortunately, the yields currently provided by investments offering a decent guarantee are very low. Locking your money away in two- and three-year CDs will yield less than 3 percent. Even a 10-year government bond, where yields have been rising lately, only promises 3.6 percent as of the day I write this.

Sales of fixed annuities have gone through the roof in the last year, as investors clamor for the slightly higher "guarantee" offered by the issuing life insurance companies. Rates here can approach 4 percent or so, if you are willing to lock up your money for 5 to 10 years Read the fine print, though, because liquidating before maturity can cause a market value adjustment, which is insurance company lingo for "you don’t get 4 percent if you need your money before 10 years."

So let’s take a look at how you can construct your own guarantee of principal value at a future date. This method does not guarantee a rate of return, but gives you a reasonable chance to do better than the guaranteed rates, along with the knowledge that your principal is safe.

Here’s how this can work. It’s not really different than a normal balanced portfolio concept, but because the amounts are structured specifically to make sure your principal value is returned at some point in the future, it may be easier to put up with the inevitable market fluctuations that tend to make us nervous and perhaps bail out on our investment plan.

Let’s say we have $100,000 to invest and we want to ensure return of our principle 10 years from now. You can buy $100,000 face value of U.S. Zero Coupon STRIPS maturing in 2019 for approximately $65,000. Zero Coupon STRIPS are bonds which don’t pay interest like normal bonds, but which are bought at less than face value, with the investors profiting when receiving full face value at maturity. So the $65,000 purchase of STRIPS provides a U.S. government guarantee of you receiving $100,000 in 2019.

Now, you can take the remaining $35,000 of the $100,000 investment and purchase a diversified portfolio of common stocks or mutual funds or hire a professional manager to direct the equity portion of the account. On the broad assumption that equities provide a return over the next 10 years equal to their long-term average of around 10 percent, the $35,000 equity portfolio would grow to about $90,000. When added to the $100,000 of maturing bond proceeds in 2019, the total account value would be approximately $190,000 – about a 6.6 percent annualized rate of return.

But, even if the stock portfolio didn’t make any money over the next 10 years and just ended up breaking even, your account would still be worth $135,000, representing an annualized rate of return of 3.05 percent, which is in the same ballpark as the various guaranteed rates being offered today. And, if the stock market vaporized into thin air and went to zero, you would still have your principal of $100,000 from the maturing bonds. By the way, if this last doomsday scenario came to pass, no insurance company would be surviving to make good on its guarantee of the fixed annuities you have purchased.

So, this is what I like to call the chicken’s alternative to the packaged products Wall Street and the insurance companies have put together to sell you. It represents a good chance to do much better, a chance of doing about the same and a very slim chance, in my opinion, of doing worse, but even in that event, you get your original principal investment back.

The approach can be modified a little further to potentially earn a higher return by using investment grade corporate bonds, which don’t offer the same guarantee as the U.S. government bonds, but have a low incidence of default.

By way of disclosure, we have ignored the possible effects of taxes, which would apply to all the alternatives above unless the strategy was used in an IRA or other qualified account. Also, the rates used in the discussion above fluctuate daily, and the end result will depend both on the yield of the fixed portion of the portfolio as well as the returns achieved in the stock portion.

In summary, I believe the next 10 years have a good chance of providing above average returns on stocks and other investments where risk is involved – the exact opposite of the last 10 years. However, I may not turn out to be right. I would rather see someone invest a minority portion of its portfolio and earn a higher return by sticking with its plan, knowing at least the principal will be safe, than to accept the very low returns of absolute guaranteed investments and then find they are not earning enough to keep up with inflation.

Tom Breiter is president of Breiter Capital Management, Inc., an Anna Maria based investment advisor. He can be reached at 778-1900. Some of the investment concepts highlighted in this column may carry the risk of loss of principal, and investors should determine appropriateness for their personal situation before investing.