Well, the year is half over everybody – it’s half time and both investors and financial markets have done fairly well. As measured by the Standard and Poor’s 500, the stock market ended up 2.6% for the first half of the year. Although this is a favorable number it was not a smooth ride. Between January and May 5th the S&P 500 ran up 6% but then quickly lost 8% over the preceding five weeks before rising once again by 5% leaving us with 2.6% year to date.

Huddle talk:

1. Weaknesses Up until recently, to much uncertainty about rate increases by the Federal Reserve have made investors uneasy. However, on June 29th the Federal Open Market Committee removed this uncertainty by suggesting they will only raise the rates one more time in August. In my opinion I think they have taken the rate increases too far - but not so much that it will have significant repercussions.


2. Strengths The U.S. economy is in its 5th year of expansion, with above average economic growth, below average inflation, below average unemployment (nationally) and historically low tax rates.


3. Challenges The next six months will have it’s own unique set of challenges: the conflicts in IRAQ and Afghanistan, hurricane season, the upcoming election year and a decline in housing markets.


4. Substitutes Although each individual is different I am favoring stocks over bonds, large companies over small and international over domestic.


5. Strategy As always, maintain a long-term focus. Don’t get distracted by short-term fluctuations – we are rarely in times of certainty so embrace fluctuation don’t fear it.

In summary the markets are doing fairly good and have no substantial issues. Stocks are up nearly 3% for the year and I am cautiously optimistic for the rest of 2006.

If you have any questions about how these factors play into your personal situation please give me a call. Communication between investors and their financial advisors is critical to success – just as it is for players on a successful team.

Enjoy a great summer with your family and friends.

Sincerely,Mark

P.S. Here is a picture of Christopher at 10 months – he is now walking along side tables and has 6 teeth.