Quarterly Client Update - March 2001 Enclosed please find your investment reports for the quarter ending March 31, 2001. The market averages posted the worst results since 1980. We are sensitive to client concerns that the last year has been one of the most volatile periods ever. Below are some examples of how the broad markets performed:  While the above numbers seem depressed, by using asset allocation our clients have done significantly better in comparison. Please refer to the second page of your reports to review both year 2000 and year-to-date 2001 results.You will see over the last 12 months you have done much better than the overall market. What is happening economically to cause this market slump? We are currently in a slowdown heading towards a recession. The Federal Reserve needs to react quickly and reduce rates again by an additional .5% (50 basis points) or more. The rate cut on March 20th was not adequate and the market did not respond positively. This problem is not only with the U.S. but global as well. The European Central Bank needs to lower rates soon as well. There is currently a contraction in inventories by major U.S. corporations as well as layoffs of their workforce. These employees are not having difficulty with re-employment due to the tight labor market. There was a sharp decline in the personal savings rate to .1% in January 2001, compared with the historical rate of 7-8%. This was also true for corporations showing .6% in the private sector.  Americans can’t spend money they do not have! A healthy savings rate is good for the economy. There were numerous mutual fund redemptions in early 2001 for tax payments.These redemptions should be over for the most part. Is there any good news on the horizon? Fortunately, yes.  As you remember we have been re-allocating your portfolios since June 1999.  Our strategy was to move to a value orientation, away from the large-cap growth (S&P 500) sector.  This has significantly buffered your portfolio from the general volatility of the market. vAlso, the use of diversification with bonds, especially TIPS (Pimco Real Return) was a defensive factor in the portfolios. It is always better to shift funds to a good sector than to sell-off at a low price and try to do market timing. We accomplished this by going to the small and mid-cap value sector of the market. Institutions are now buying heavily in this area. Many of these smaller companies have much better potential than their large-cap counterparts. We will most likely have some tax cuts by July 2001. This will lower long-term capital gains rates and possibly the 40% top tax bracket. This should produce a positive effect on market growth. There are many stocks trading in bargain territory today. First quarter earnings announcements should be relatively good for many value stocks. These stocks, we are convinced, will lead the recovery & not the technology sector. The new philosophy on Wall Street is GARP (Growth at a Reasonable Price).The greed of the past has turned to sensibility! Our economy is still the strongest in the world.  Inflation for the 12 months ending January 31st was 3.7%, which is acceptable. The Euro will recover when the European Central Bank lowers rates, bringing the Euro on par with the U.S. dollar. This would significantly improve returns on the international sector of your portfolio. Oil prices have peaked at around the $25 per barrel level. OPEC is expected to keep prices stable.  President Bush will need to take drastic action for oil exploration, if this becomes a large issue. Recent news at Singer Xenos Investment Management: Our long-time employee and portfolio analyst, Madeline Palenzuela, has left us to attend law school at the University of Miami. She will be missed after nine years; however, we wish her the best in her endeavors. Albert Chu, CFA, formerly a research analyst for Mutual Fund Magazine and senior investment associate for Harris Trust of West Palm Beach, has joined us as our new portfolio analyst. We welcome him and are sure you will enjoy interacting with him. Faith Xenos, CFP was recently honored in Miami Business Magazine for her efforts on behalf of many South Florida charities with which she is actively involved. Our firm will be conducting several educational seminars on the new changes in the Federal Bankruptcy Laws and how they affect asset protection. This program will be of great interest to our physician clients. Invitations will be sent under separate cover. In conclusion, we understand the responsibility you have placed in us managing your money. We remain dedicated to you and appreciate your patience and trust. We expect to take full advantage of the recovery, and put this correction behind us.