1st Quarter 2007 Newsletter
The U.S. financial markets started 2007 with a substantially higher level of volatility, as compared to recent years1.  A sharp downward
adjustment in the Asian markets during late February, coupled with a spate of bankruptcies in the
mortgage lending industry in the U.S. at
the beginning of March, set the stage for a rollercoaster-like scenario in the markets. Most of the mid-term declines were recovered by the
end of the quarter, with the rebound fueled primarily by merger and acquisition activity, and a locally stable macroeconomic landscape.

The decline in Asian markets in late February was a reminder to all investors about the implications of a global economy; while the March
headlines revealed the weakness to which the
subprime mortgage industry is currently exposed.  But despite these two events, solid
employment numbers, stable energy prices, a low interest rate environment, and sustained corporate earnings growth have been the
anchors that have helped the U.S. markets hold a steady course.  

The Dow Jones Industrial Average ended the quarter at 12,354.35, down 0.33% for the year.  The S&P 500, a broader measure of the
stock market, finished at 1,420.86, up 0.64% for the period
2.  Within the U.S. equity markets, small-cap stocks outpaced large-cap stocks,
while the value versus growth match threw mixed results, favoring value in the large cap segment, while growth was the clear leader in the
mid-cap space.  In the international arena, the MSCI EAFE Index (a proxy for developed international markets) was the overall
leading performer with a return of 4.15%
3 for the quarter.

The bond markets recovered during the first quarter of 2007, as the Lehman Aggregate Bond Index returned 1.50% versus a previous
1.24% during the last quarter of 2006.  U.S. Treasuries experienced mixed results, with a slight decrease in short term yields, the 10-year
note dropped to 4.64% from a previous 4.70% at the end of 2006, while the 30-year bond rose to 4.84% from 4.81% in the previous

The U.S. Economy grew 2.5% during the last quarter of 2006 versus a 2.0% increase during the third Quarter. Currently the US Economy
is looking at a forecasted growth rate of 2.4% for the first Quarter of 2007 according to the last Bloomberg survey on March 7th.

The Federal Reserve (“the Fed”) decided to leave rates unchanged at 5.25% during the quarter, a continued policy that has kept rates
stable for more than nine months.  Although less “hawkish” than in the past, the Fed signaled that it is monitoring inflation closely since it
has not yet eased to a level considered acceptable by the Fed’s standards.  Measured by the
CPI inflation for the month of February was
2.4% on a year-over-year basis
5.  Unemployment, as measured by the jobless rate released by the Bureau of Labor Statistics in February,
was 4.5% - in line with the three previous months.

Oil futures closed at $65.87 per barrel at the end of March, an increase of 7.9% from the $61.05 registered by the end of 2006
6.  The U.S.
Dollar depreciated against the Euro 1.33% for the quarter; while remaining almost flat versus the Japanese Yen losing only 0.71% for the
same period

As we move further into 2007, we remain confident in your investment strategies and will continue to monitor them closely against your
financial objectives.  As always, please let us know about any upcoming changes to your financial goals and we welcome the opportunity to
spend time with you to review any issues you may have.


1 Measured by the VIX (the most referred Volatility Index for the Chicago Board Options Exchange)
2 Bloomberg  These figures represent “Total Return” with dividends reinvested, which means the return includes not only the change in
price for the securities in the index, but any income generated by those securities
3 Bloomberg
4 Ibid
5 Bureau of Labor Statistics
6 Bloomberg
7 Ibid
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