Grinding It Out

As we enter the fourth quarter, the market appears to be at a crossroads. Solid corporate earnings seem at odds with the specters of rising energy costs, budget deficits and divisive political uncertainty at home and abroad. In the face of these headwinds, the markets have been in a relatively tight range, with the bias to the downside.

Through September the Dow Jones Industrial Average is down 3.6%, the NASDAQ is off 5.3% and the S&P500 just above break-even….Our investment strategy combined with increased trading activity and a healthy bond market allowed us to grind out a gain and crush the market averages. We continue to invest in companies we feel will produce a fair rate of return, using the same fundamental analysis that has prospered our clients for many years.

We are keeping a close watch on the fixed income arena. We hope to garner some income- producing vehicles at attractive valuations as interest rates rise. We are encouraged that Fidelity Investments has an improved trading platform with enhanced bond pricing transparency and lower cost structure for trades in fixed income.

We wish to thank you for your continued business and faith in us. As always, feel free to share us with any friends who haven’t fared as well as you in these down markets.

Sincerely,

Thomas E. Guyett