Title: Simple Lesson Date: 6/30/03 The most important aspect of the second quarter rally is the lesson it taught us. And that lesson is simply: you don't know! No one knows what the market will do over the next quarter or year. I spent over 20 years in contact with the best minds in money management, economics, and trading and if I learned anything it was that they no one can consistently foretell the future. Many experts called for investors to remain in cash for the first half of 2003. As we now know with the exquisite clarity of hindsight that was a huge mistake. You can watch the business news or surf the net or read your favorite columnists or even call me and you will always get an opinion. The exercise might be fun, enlightening and maybe even somewhat beneficial. Yet, you should not rely on anyone's predictive powers to dictate your investing. Establish an asset allocation that befits your wealth, risk adversity, age, time horizon, liabilities, and special factors without regard for anyone's personal prognostications. Long term investing calls for prudent risk/reward portfolios that match your unique situation. It does not mean constantly trading according to the purportedly prescient pundits. Of course conditions may dictate some adjustments and I am not completely against active investing; it just should be accomplished in conjunction with a sound base plan. For most of my clients, their stock allocation runs from 50-75% of their total portfolio. Some movement within these parameters makes sense absent no other change to the individual's situation. Wandering outside these levels on a regular basis indicates a lack of perseverance. Marty Gallagher <- Back Home