WERNER & CO, PLLC

INVESTMENT ADVISORY NEWLETTER

FEBRUARY 23, 2005

This past quarter (November, December and January) is a story of two months up and one month down for an overall gain of 6% for average diversified equity funds. November was a surprise with the post election rally followed by December, which was a surprise for a month that normally sees profit taking followed by January, which also came as a surprise. In other words, once again, the short-term markets remain thoroughly unpredictable. However, the old lesson still remains – you have to be at the station when the train comes through, or you miss the train!

Recently I updated my list of recommended funds, dropping a few old names and adding a few promising funds. Mostly I am still pleased that funds which had been consistent positive performers, continued to perform well in 2004. Among the firms dropped were Marsico Focus, Gabelli Growth and Oakmark Equity and Income Fund. None of these funds were performing badly, but each of them seems to have slipped into a state of mediocrity. Among the new funds added to the list are Fidelity Blue Chip Value Fund (a value oriented fund specializing in large companies), Alpine Dynamic Dividend Fund (a fund seeking companies that pay substantial dividends), TCW Gallileo Dividend Focus (a fund with a number of familiar Northwest companies), Vanguard Windsor Fund (a value fund with a very long term positive record) and Causeway International (an international fund specializing in small and medium size companies). Where appropriate we will be investing into one or more of these funds as well as our other funds which have been proven winners.

Following two good investing years, 2005 may prove a challenge. Nevertheless at this time there are a number of positive economic indicators. As we continue to seek out a sensible and rewarding investment path, please feel free to call me anytime with your investment or financial issues.

Best Wishes for 2005,

Roger Werner, CPA