Gala co-chairs Mrs. Susan & Dr. Robert Fischell

In keeping with the global theme, planners adorned the ballroom and reception areas with decorative fixtures representing far flung regions where Maryland researchers have forged an ongoing presence, including Africa, Asia, Europe and South America. Dr. Robert Fischell and wife Susan served as honorary co-chairs of the event and deftly guided the program which included the investing of 19 chairs and professors as well as the deanship. UMB president David J. Ramsay and SOM dean E. Albert Reece conferred the medals on faculty honorees.

Following the program, guests danced to big band sounds of Mood Swings, featuring Jack Vaeth, ’92, a Baltimore area psychiatrist. The gala raised more than $242,000 for the school primarily through the generous support of corporate sponsors and friends. Planning is underway for the 2010 event, and information will be published in upcoming issues of the Bulletin.

New Elm member Burton G. Schonfeld, ’68, center, with classmate Howard, ’68, & Roni Semins

Three new Elm member from the class of 1969 include Paul J. Connors, Emile A. Bendit, and Edwin E. Mohler

New 1807 Circle member Lillian Blackmon-Crenshaw, MD, with Dean E. Albert Reece, MD, PhD, MBA

JBDA Alliance Luncheon Highlights Recent Gifts

More than 60 individuals were installed into the John Beale Davidge Alliance on Thursday, April 30. The society for major donors, created in 1978, now boasts more than 900 members. The event was staged at the M&T Bank Pavilion of the Hippodrome Theatre and was co-hosted by the medical school and alumni association.

It is our belief that the market gets the blues from uncertainty even more than from outright bad news. With this in mind, we feel that the main sources of uncertainty are that the length and the depth of this economic decline are unknowable, that policy actions are indeterminate and suboptimal given the current political environment, and that the financials sector woes continue with their requisite impact on credit creation. While significant uncertainties and downside risks remain, there does seem to be some improvement across all three of these sources of uncertainty. It remains to be seen if the early signs of economic stability will be sustainable. We continue to find the investment downside risk most acute in the developed international markets when we combine our concerns about the economic downside risks with our consideration of foreign exchange risk.

We fully expect the short term to continue to be volatile as the market struggles with news flow regarding economic indicators, corporate earnings, policy actions, and geopolitical concerns. We believe that stocks do provide an attractive risk versus reward for investors with a sufficient investment holding period and the ability to withstand volatility. We continue to recommend that investors work with their advisors to select an appropriate asset allocation that retains sufficient so-called “safe” assets—defined as high-quality bond holdings and cash—to provide an appropriate level of assets and cash flow to ride out the volatility in the financial markets while balancing the needs to grow real purchasing power to reach financial goals. An allocation to high-grade fixed income helps reduce risk by moving investors up the capital structure senior to equities and providing significant cash flows while the numerous uncertainties remain.

We believe that developed international economies may lag the United States coming out of this downturn, and we prefer to reduce foreign-exchange risk because the dollar has been shown to be a safe haven during times of global turmoil. Emerging markets seem to combine some different risk and reward characteristics than many developed markets and seem to be showing early signs of stabilization. In general, their banking systems seem sound, but their economies are subject to steeper downturns due to their more cyclical economies and reliance on exports. Emerging markets equity returns historically have been more sensitive to commodity prices than the S&P500 or MSCI EAFE, which makes them attractive in terms of an inflation hedge. The problems in the emerging markets are in our opinion cyclical and not structural in nature. It seems likely that emerging markets will continue their march toward closing the gap with developed economies, which should be very positive for future long-term emerging market returns.

Poorly functioning capital markets and the credit crunch, against the backdrop of a weak global economy, pose a higher threat to lower-quality and highly leveraged companies, but the high-quality, conservatively financed companies are likely in the best position to benefit from the situation, because they can acquire assets and gain market share at a discount in order to increase shareholder value. Companies with weak balance sheets and less-robust business models have a much higher risk to their survival.

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