3rd Quarter

October 14, 2003

It is said that all good things come to those who wait, and that patience is the greatest virtue. No more vividly has this been exemplified than within the last three and a half years. After three straight years of falling stock prices, and a recession to boot, the last two quarters have brought about a bountiful harvest to those who had the gumption to stay invested in the stock market.

After much speculation of a double dip recession and transition to deflation, the economy seems to have weathered the storm and has stayed buoyant since the beginning of this year. While inflation has stayed dormant, consumer spending has continued unabated and the historically low interest rates have helped sustain the robust housing market. In addition to these indicators, the recent increases in industrial production, the ISM manufacturing index and the April to July increase in durable goods orders have laid credence to the fact that we are indeed in a recovery mode.

Nevertheless, there is the fear that consumers are over extended in their credit. In addition, the loss of more than a million jobs since we exited the recession in November of 2001, which has translated into a relatively high rate of unemployment, has made economists term this “the jobless recovery.”

On a separate note, just as the wheels of justice were beginning to turn on Wall Street in regard to the corporate malfeasance, we were chagrined to learn about the improprieties in the mutual fund industry. As bad as the corporate misdeeds were, the scandal in the mutual fund industry hit us harder since these were some of the people who we had entrusted to look out for the best interests of our clients. These were managers and fund families we kept in high regard. However, we do think that these are isolated incidents and are hopeful that those who are guilty will be prosecuted to the fullest extent of the law and that justice will finally prevail.

In conclusion, it would not be an overstatement to say that within the last three and a half years, there has never been a time that we have been more pleased to send you your quarterly statements. While we are glad for our clients, we are also aware that this is not the time to become complacent. In fact, these are the times to be vigilant of rising trends on the horizon and to make sure that our clients’ portfolios are well allocated to take maximum advantage of any such trends. It is also the time to make sure you are well balanced and protected on the downside so that we can face the next bear market with confidence – whenever that may be.

Sincerely,