I have long taken the approach that successful portfolios should have a focus that extends beyond style (small, mid and large cap companies) and look at trends. Trends result in investments rotating into different areas (or sectors) to take advantage of anticipated growth in the markets. Many of you saw a shift earlier this year into pharma, taking advantage of the share price declines in both Pfizer and Merck. My strategy has also been to move portfolios into the international markets as well as dividend yielding companies. Additionally, I have looked at companies that are possible acquisition candidates. My flexible investment strategy allows me to look beyond the traditional pie chart allocations and into investments that I feel will yield long-term success and profitability for my diverse client base.

The recent additional of Impact Mortgage Holdings (IMH) in mid-March proved to be a proverbial "timing is everything" success. Most of my clients saw this addition to their portfolios at $17.63 a share. It is currently trading at around $22, roughly a 25% increase in 3 months, with a 13% yield. Not the typical stock I would put into a portfolio, but great multiples and a nice turnaround on investment dollars.

As of Friday, July 1 (yes, I am still working, as you all are lathering on the sunblock) the markets have ended the week on a stable note, but we are still down for the year. On July 7, the Feds raised the fed fund target rate to 3 ¼%. It was the ninth straight meeting at which they had raised the target rate. The S&P 500 dropped that day in response to the tightening. There was some upbeat economic data over the past week to stabilize the markets. The consumer confidence level had risen, GDP was revised upward, and unemployment claims were lower than expected.

The chart above is a review of how the numbers ended for the second quarter of the year. Most of the portfolios I am currently managing are flat or up 1 - 2%. Performance will fluctuate by clients, as no two portfolios are identical.

The Supreme Court ruled unanimously that IRA accounts are shielded from creditors in bankruptcy proceedings. This case reversed a lower bankruptcy court ruling for an Arkansas couple. The lower court ruled that the couple could not keep their IRA money, which was originally rolled from their employer sponsored 401(k) plan into an IRA. Had it remained in the 401(k) plan it would have received ERISA protection under bankruptcy law. There is a $1 million maximum, adjusted for inflation, that a debtor may claim from exemption from creditors. The issue was whether tax-deferred IRA's are exempted from creditors. More than 45 million Americans have IRA's and approximately 1.6 million declared bankruptcy in 2003.

In the past I have urged clients to leave the 401(k), 403(b) or 457 plans intact with their previous employers, particularly if they were starting their own business or if their new employer did not offer a particularly good plan. With this change in IRA protection, I would encourage you all to revisit your past employers' plans and move forward with IRA rollovers. Most 401(k) plans offer you 10 - 20 mutual fund selections. If you move forward with a roll-over to a self-directed or active asset management account, you have thousands of choices. For those of you who maintain 403(b)'s in CREF, not all of these assets are eligible to move out of the Traditional portion of your retirement investment accounts. Please contact me for the specifics of these plans.

Angela Thomson was recently quoted in the May 31st and the June 5th editions of the Providence Journal. The first article was a response to a Money Line readers' question. The readers' concern was the potential for a General Motors bankruptcy as well as the future of the Smartnotes they had previously issued. In the interview I had shared with the Journal readers that I did not hold any GM stock and would not purchase any of this stock even at these distressed levels. Their reader's question also focused on the dividend GM was yielding. In the article I offered options for other high-yield investments, some of which are in my portfolios, and some of which I have buy orders out for.

The second piece the Journal ran was on appropriateness of investments for IRA's. The discussion revolved around the tax treatment of gains, i.e. long-term vs. short-term and dividends. If any of my clients ever have questions, about investments or recommendations I make via the Journal or other publications, please feel free to contact me.

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