Many of my clients have the Eaton Vance Utilities Fund in their portfolio. This has long been a core fund in developing most investment strategies. Effective August 15, the fund will undergo a name change. The new name will be Eaton Vance Dividend Builder Fund. Focusing away from utilities and into dividend paying common stocks. Eaton Vance is broadening its universe of potential investments available to the fund manager.

My personal position is to "wait and see". I will be exploring other utility funds, as I believe this sector belongs in most portfolios and I currently own other funds that focus on dividend producing investments.

Royce Fund closings: To update you, the following Royce funds are closed to new investors. Royce Low-Priced Stock, Royce Premier, Royce Micro-Cap, and Royce Opportunity. As this list updates I will post changes.

Many of us have changed jobs over the years, taken early retirements, or just been unsatisfied with our IRA rollovers. This has resulted in lots of paper from different investment institutions, not amounting to one significant investment. You have thought about consolidating these investments . . . . . Procrastination - process - your time - all add up to losing precious retirement dollars.

The Three A's

Consolidate Accounts: By consolidating assets this helps you to see your entire investment picture. Some common mistakes are overlapping asset classes. You are either duplicating the same investment assets or completely missing a sector. Eliminate some of the confusion and consolidate these retirement assets. One statement helps you to see the whole picture.

Asset Selection: If you leave your assets within your old employer's 401(k) or other type of retirement plan, you are generally limited to 14 or fewer fund choices, or worse you may have a large concentration in your employer's stock (remember Enron). By rolling your assets into an IRA you have access to a wide array of investment vehicles, probably with far superior performance than available in your existing plan.

Ease of Accessibility: One of the basic financial planning rules is making sure you and your family know how to access all your important documents in case of emergency. By consolidating your account statements you have made the process easier for you and beneficiaries if an unforeseen situation should arise.

As of June 29, 2007 the markets are behaving fairly well, although we have had ups and downs throughout the first half of the year. Below is a chart that reflects the various indices. As for the back half of the year, I believe we will continue to see a volatile and less predictable market. Natural resources will continue to have a presence in almost everyone's portfolio, as the category has performed well the first half of the year, indexing up 14%. Real estate was down for the year by -7%, but I do not believe it should be removed from portfolios at this time.

Overall I would be happy ending the year with a historical plus 10%, even with bumps in the road. If we finish out with a smooth back half, it would be reasonable to expect a 12% return based on how the portfolios have performed year to date.

As a reminder the S&P represents an index of 500 unmanaged widely held common stocks, which includes the reinvestment of dividends. The Russell 2000 are market capitalizations that represent the 2000 smallest companies.

In the past I have discussed foreclosures as an opportunity for first time homebuyers to pick up a property at a discount or for older investors to capitalize on an opportunity to generate investment cash flow from one of these foreclosures.

Today I would like to discuss why the abundance of foreclosures could actually hurt the investment market. We know that foreclosures drive down housing prices. Nationally home prices have dropped by 7.73%. In Rhode Island prices have dropped by 4.1%. Foreclosures are not just a sign that consumers didn't calculate the impact a jump in variable rates would have on their monthly mortgage payments. They also indicate far worse underlying economic pressures, like employee downsizing and plant closings.

The drop in home pricing has created a ripple effect. With the glut of distressed housing available in all areas of the market, it now becomes more difficult to sell homes that have traditionally been considered desirable housing. Also, if the economy took you from being part of a two-income family, to a one-income you may now be forced to tap into your investments, i.e. selling at a time when equity market conditions may not be favorable. The ripple could continue into forcing a discontinuance in contributions to your retirement savings or educational funding programs. Hence the market suffers.

My sense is mortgage rates will have to drop, in order to control the amount of foreclosures connected with the increase in variable rates. I don't see this trend leveling off until the end of 2008.

In June I had the opportunity to be interviewed for a piece in the Sunday, Chicago Tribune, along with other CFP's. It was a fun article covering investors personalities. If you have time, click on the link below and try to find yourself in the group,
I am pleading the Fifth, I refuse to confirm or deny whether I agree with your assessment of how you have typed your own investor personality. Have fun!

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