March 11, 2000

Dow Jones Industrial Average 9,928.82
S&P 500 Index 1,395.07
NASDAQ 5,048.62

Dear Investor:

It is of our belief that the equity markets will continue to be weak for at least the foreseeable future. We feel that rising interest rates, fuel costs, wage costs and other pricing increases will cause a drain on future earnings for many companies.

We also are of the belief that the “Small Cap” and NASDAQ markets are due for a major valuation downturn. These markets have been skyrocketing, while traditional “old economy” companies have been suffering declines in the prices of their shares. Please keep in mind that Microsoft; Lucent, and Dell are starting to be called “old economy” companies. We are amazed that these cutting edge companies are being labeled as “old economy.”

We have seen an unprecedented rise in equity prices, without evidence of a corresponding rise in earnings or revenues. Historically, this divergence has corrected itself via a reduction of inflated equity prices. We continue to recommend portfolios that are balanced with an emphasis on high quality fixed income investments. We stress that investors must be cognizant that a material loss of value can occur when holding equities (see Procter and Gamble, week ending March 10, 2000, loss of 40%). We continue to invest in traditional value plays such as General Motors Corp., Hasbro Inc., Philip Morris Cos Inc., the Energy Sector, and Waste Management, Inc. We have been selective in our investments in the technology sector and look forward to more favorable valuation levels so we can eventually overweight this sector.


Information herein is believed to be reliable, but its accuracy and completeness cannot be guaranteed. Opinions, estimates, and projections constitute our judgment and are subject to change without notice. This publication is provided to you for information purposes only and is not intended as an offer or solicitation. Redfield, Blonsky & Co. LLC and Ronald R Redfield, CPA, PFS, may hold a position or act as an advisor on any investments mentioned in a report or discussion.