~ Investment Advisory Bulletin ~

May 2003

As you probably recall, I try to send you an investment newsletter each quarter at the end of the month following the quarter-end.  For the quarter ended January 31 all the investment news plus the press of our tax practice led me to delay the newsletter for one month.  In this newsletter I report on March and April – a short quarter but what a great quarter!  In the past two months the average mutual fund has gone up 8.1% on an income reinvested basis!  Better still 7.6% of that amount was gained in April.  This gain was earned across the board with the sole exception being the predictable loss in precious metals.

In the past three-year recession we have had several up tick months which I had hoped would be the beginning of a sustained recovery.  None of those were.  However, this time it has a feel of a recovery.  Many investment counselors are pointing to a number of statistics which support a recovery.  The Fed appears now to be more concerned about deflation and continued recession than with an inflationary environment.  And finally the recent upturn occurred without a great deal of speculative fervor.

If this market is indeed the beginning of a rally, where should we invest?  At this point there does not appear to be a clear leading sector.  Growth, value, small cap, technology, international – all are showing strength.  My favorite investment advisory source, Sheldon Jacobs, has spread his recommendations across the board.  Interestingly he has added a number of new funds to his recommended list.  These include old favorites such as Fidelity Growth and Income as well as newcomers such as Fidelity New Markets, Baron Small Cap and Mason Opportunity.  This is a time when I think you should consider increasing your equity investment, while at the same time maintaining a well-diversified portfolio.  After a bruising three years, I hope that your patience is ready to be rewarded.

Please call me anytime that I can be of assistance with any of your financial or investment affairs.

-- Roger D. Werner