INVESTMENT NEWSLETTER
March 2010

Resilience

Stocks resumed their upward march after a mid-January through early February correction. The DJIA and the S&P 500 ended the month up 3% and 3.1%, respectively. The small-cap Russell 2000 gained 4.5% and the tech dominated Nasdaq 4.6%.

Gains were strong in February, but not quite strong enough to recover all January's losses and most U.S. indices are slightly nega-tive for the year. International markets were weaker than domestic, and the DJ Global Index, excluding the U.S., lost 0.1% in February and is down 4.8% year-to-date.

The average U.S. stock fund was up 3.7% last month. Mid-cap funds were strongest, followed by small-caps then large-cap funds. Real estate was the top performing sector, delivering 5.6%. International funds continue drifting down the ranks and currently only one Class 3 Buys is foreign, although several remain as Holds. Class 1 and 2 emerging market funds were flat with pockets of strength in Latin America and China. Keep in mind that China started correcting last November, losing more than 20% peak to trough.

Yet the last 12 months marks a window of exceptional global gains. The widespread rally that brought markets back from the brink in 2009 was one of the biggest ever.

One year ago investors wondered where the bottom might be. Major indices closed at their lowest levels in 12 years. Many investors became overly conservative, while others reassessed their risk tolerance and may stay away from stocks for years. The problem is that at every milestone, the future is no more knowable than it was at the previous one. But it was a good bet that stocks would rally strongly off the bottom.

Best to Stay the Course

We reiterate our belief in the power of businesses, and their shares, to outperform all other investment classes over the long term. Even after the terrible 2008 declines and the "lost decade" ending December 31, 2009, we fully expect stocks to outpace all other investment category over the long-term. At the same time, we believe most investors are best suited to a balanced portfolio that includes fixed income to buffer the volatility inherent in stock investing.

Successful investing is about making decisions based on long-term goals. Investors who follow a disciplined investment strategy endure the volatility of the market's ups and downs but are positioned to achieve their long-term goals.

Thank You for your trust and continued support!

Sincerely,

P. Michael Valley II
Estate Planning Professionals