Optimism

Though we have had a significant rise in the stock market this year, we remain optimistic for further gains and feel that on any meaningful market pull back we will be adding to our core position. This is supported by this quarter’s corporate earnings that were much better than anticipated and the improving balance sheets of companies. The economic indicator data shows recovery as well, and the market sentiment is still somewhat negative (contrarian positive for the stock market)

We feel that the dollar will go lower and it will lead commodities, oil and gold higher. We feel China will continue to be a good place to invest and are leading the world out of the global recession. China’s valuation remains very good and the long term investment case for China is very much in place. Also, with the prospects of a lower US dollar, we also continue to buy international stocks.

End of the year tax planning is very important. I feel that taxes is on its up -- May be way up. If you have taxable accounts this is the time to review them and get rid of your losers. Add our core investments of China, Oil, and commodities and add shorter term Municipal bonds for fixed income.