1st Quarter 2009

April 8, 2009

Dear Valued Client:

As the first quarter comes to a close, it is time for us to reflect on where we have been and strategize where we are going. The past 6 months have been the most trying period in our history in the business. All markets have drifted down: the stock market hit major lows in November ’08 and recently re-tested them March ’09; the bond market sold off due to fear that corporations were going to default on their debt; the housing market suffered as prices continued to decline and foreclosure grew; and job losses increased. The only small positive has been the short-term US Treasury bond market because scared investors poured billions of dollars into the government in search of safety. The BAD news has pounded us daily on the TV, Internet and in newspapers.

Many of us have not been able to watch our portfolios lose so much value and have retreated to cash or the bank. We feel now is the time to start bringing money back into the market and begin recouping losses. If we wait until the worst is over, we may miss some of the most significant market gains. Here are our reasons for optimism.

1. The cost of money is cheap. Fed Funds rates are between 0-.25%. This allows banks to borrow cheaply and lend at low rates.

2. The Federal Government is flooding the market with dollars. The money has to go somewhere, so the markets should indirectly benefit.

3. There are trillions of dollars on the sidelines that can be made available to the markets. (The interest paid on these funds is not sufficient enough to let it stay on the side forever.)

4. Corporations are more lean and mean. Excess has been shed which will make them poised for profitability when the economy turns. As companies report first quarter earnings with their future earnings more clear, the markets should react positively.

5. Re-regulation of the financial markets should curtail previous abuses in the mortgage and financial markets.

We are always available to help you navigate the financial markets and feel it is time to jump back in. If you are not ready to commit back 100%, we can always set up a dollar cost averaging program where you invest equal amounts of money over a predetermined timeframe (i.e., 3-6 months). Please contact us to discuss your avenues back to investing at 510-317-2380.

Sincerely,