Investment Advisory Newsletter

November 2003

As I go to press, the news on the equity (stocks) markets continues to go well. In the three months ended October the equity markets are up 9.7% giving us a total rise of 26% since the beginning of the year. On the other hand, the bonds markets are flatter, showing a 1.7% rise in the last three months and 6.5% for the year. This growth is concentrated heavily in growth equities, primarily in the small and mid-size companies, real estate (due to low interest) and technology (due to devastating low values from a year ago). As a result I am rotating several funds on our recommended list and making a number of changes for many of our portfolios.

I must apologize for the timing in getting this report to you. The October 31 st statements were late to arrive here and my mutual fund report arrived later still. When this was topped off with the Thanksgiving holiday, it pushed this report out later than customary. Further, for several accounts the latest report is for September as noted on the top of your report. For those of you with a September report I will hasten to add that October and November have shown positive results that you will see in the next report.

The most common question I am getting these days regards the mutual fund scandals. In the past several months many mutual fund families have been struck with their admission of improper trading either by late trading or by allowing short term investing. This has hit Canary Capital, Strong Funds and Putnam Funds hardest. At this point I am still relying heavily on mutual funds for our investing in that there is not a better alternative and that these improprieties are not universal. I am avoiding funds which have had significant improper trading. Beyond that I believe that we should stay the course with the mutual funds we have and monitor the situation in case an alternate investing strategy should become necessary.

As we close out this year, I thank you for your continued loyalty and allowing me to work with you on your investments. I wish you the best happiness for the Holidays and encourage you to call me at any time with your financial or investment issues.