January 10, 2007

Dear Client,

We wish you a happy and healthy 2007! Enclosed are your performance reports for 2006. We hope to have our annual letter out before the end of February.

As you review these reports, please keep in mind the following:

1. You can always call with any questions.

2. Your portfolio is designed for the long-term. We should not be judged by short-term performance. A portfolio should be judged by a minimum of 3 years, and realistically, 5 years. It is our opinion that we should be compared to “Balanced Funds.” We have included performance results of two balanced funds, along with other comparative indexes, in your reports.

It is very possible, and at some point expected, that we will have a year, or a period of years, where we not only under perform comparative indexes, but also lose money at the same time.

The following table indicates the compounded value of $100,000 at 5%, 10% and 15% for 10, 20 and 30 years.

$100,000 Initial Investment:

5% 10% 15%
10 Years $162,889 $259,374 $404,556
20 Years $265,330 $672,750 $1,636,654
30 Years $ 432,194 $ 1,744,940 $ 6,621,177


3. We are focused investors, and often have concentrated positions. Many portfolios have three positions which make up over 40 – 60% of the portfolio. This concentration can increase the price volatility of your portfolio.

4. Please visit our website at www.rbcpa.com. There is a great deal of valuable information on our site.

5. If we do not already have your e-mail, please send me an e-mail or call me with your e-mail address.

Best regards,


Ronald R. Redfield, CPA, PFS