With the S&P 500 Having Gone Nowhere
in Nine Years, CornerCap’s Chief Investment Officer Offers Comments to Answer the
‘What’s Next’ Question

ATLANTA – (July 15, 2008) – Editor’s Note: The following white paper was written by Thomas E. Quinn, the chief executive officer and chief investment officer of Atlanta-based CornerCap Investment Counsel.

Some remember the 1970s when the stock mark index was essentially flat for an entire decade thanks to the OPEC oil cartel driving energy prices up astronomically while inflation was ratcheting up throughout the same time period.

“Now, thirty years later we appear to have circled back for a repeat of that disappointing decade,” says Thomas E. Quinn, the chief executive officer and chief investment officer of Atlanta-based CornerCap Investment Counsel, in a recently published commentary.

“Over the nine years between 1999 and 2008, a period many have referred to as the ‘Lost Decade,’ the S&P 500 stock index was down 6.75 percent or -0.8 percent annually and like the 1970s energy costs are once again skyrocketing, crowding out consumer purchases and contributing to fears of inflation,” Quinn notes.

Noting that CornerCap’s equity returns during this period were well over the averages of the Lost Decade, Quinn says a disciplined investment process that recognizes the booms and busts of the short-term market swings is the key to avoiding long-term pain.

“There is no magic,” Quinn says. “Beating the averages over time requires a consistent philosophy and strict adherence to a buy / sell discipline which keep the probabilities in your favor.”

The full text of Quinn’s commentary is available online and may be downloaded at no cost from http://www.cornercap.com/library/Articles/07_15_08a.shtml.

According to Quinn fear appears to be rampant now, with many investors selling their stock holdings. But probabilistically Quinn says broad selling now makes absolutely no sense.

“We can realistically observe the behavior of other investors,” Quinn says. “We can objectively quantify when their behavior overpower the facts. In the long cycles, we can take advantage of those infrequent by really extreme investor obsessions. In the short cycles, we can continually rebalance our portfolios,” he says.

“Simply stated, if we pay attention to probabilities rather than the pundits, we may lose a few small hands but we should ultimately win the game,” Quinn says.

About CornerCap

CornerCap is an independent investment counseling and management firm focused on providing quality investment decisions and the highest level of client service. The firm has been serving clients since 1989, providing investment management services to private clients, institutions, foundations, and endowments. CornerCap serves clients around the globe from its offices in Atlanta, Ga. and Charlotte, N.C. For more information call 404-870-0700 or visit www.cornercap.com.

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