Singer Xenos is pleased to report that 2005 is the sixth year in a row our managed portfolios have out-performed their respective benchmarks. In this new year, we are already planning strategic moves that we expect to pay off significantly over the next twelve months. We believe a thorough analysis of the past year is the best place to start.

Economic and Market Overview

The major equity indices finished 2005 with moderate gains at best. The S & P 500 finished the year up 3.0%, the NASDAQ was up 1.4% and the Dow Jones Industrial Average was actually down 0.6% in 2005.

Inflation has remained well contained, and we are getting strong signals that the Fed will finish tightening rates at the next meeting in January. Fed fund rates should remain in the 4.50% to 4.75% range with inflation around 2%. Unemployment declined as companies with earnings growth continued to hire more workers. If this benign environment persists, economic growth should be robust.

Worldwide commodity prices are rising as demand continues to exceed supply. The “China Effect”, with its unprecedented growth, has driven demand for basic commodities and oil. We see this demand continuing for at least the next 12-24 months.

In the domestic markets, Mid-Cap Growth stocks were the bright spot in 2005 with an average return in the 12%+ range. The Large/Mega-Cap Growth companies seem to be undervalued 15% to 20% relative to historical levels, depending on what measure is used. Many of these companies have huge cash resources available on their balance sheets that can be utilized for business investment and expansion. We expect this sector to benefit even if there is only a moderate increase in earnings. As a result, look for us to add more exposure to domestic Large Caps in 2006.

Portfolio Update

Overall for 2005, your portfolios had superior returns compared to the market as a whole. Much of this performance came from our choice of sectors, the additional positive return resulted from specific manager selections.

At the beginning of 2005 we reduced domestic small-cap exposure and over-weighted international equities and increased domestic mid-cap equity exposure. This was a real boost for portfolio returns. The international sector had returns of 15% - 25% for 2005. Global trends currently favor the emerging markets and we expect to continue to over-weight the international sector in the near term.

In order to take advantage of rising oil and commodity prices, early in 2005 we bought the Pimco Commodity Real Return Fund. Our exposure to the commodities sector was a good call as this fund was up over 20% for the year. We will probably increase investment in this sector going forward due to the issues discussed above.

Singer Xenos chose many excellent managers this year. The William Blair International Fund registered a gain of 22%, the Keeley Small Cap Value Fund was up 16.1% and the North Track Managed Growth Fund gained 14.3%. We continue to conduct due diligence on our existing managers (having held conferences with nine managers in the fourth quarter alone). We were particularly encouraged by our meeting with Mike Keeley of the Keeley Small Cap Value Fund, who mentioned the great deal of purchase interest in the companies in its portfolio. Likewise, we were pleased with our conversation with the Artisan International Small Cap Fund manager, who believes there is still significant opportunity in the small-cap international universe.

Fixed Income

We made some changes in your bond portfolios as well. We sold Loomis Sayles Global Bond Fund, the PIMCO Short Duration Fund and reduced our holdings in the PIMCO Total Return Fund, and increased our exposure in the PIMCO Developing Local Markets Fund. The PIMCO Developing Local Markets Fund was only recently launched to outside investors beginning in September. We found this Fund attractive as it invests in short-term debt in emerging countries where the risk profile has diminished drastically due to their solid economic development. The Fund is denominated in local currencies, which makes it even more attractive once the Fed discontinues raising rates. We believe the rate increases will stop shortly, and this fund will be one of the beneficiaries.

News at Singer Xenos

Marc Singer and his wife Helena Igra, M.D. were honored by Chai Lifeline Southeast at the Gala Event of the Year for their generous support of the organization which helps children with cancer and other chronic illnesses and their families cope medically, emotionally and financially with the problems they face.

In addition, we were honored that the South Florida Business Journal named Faith Read Xenos as a Heavy Hitter in finance. Only 41 individuals were chosen for all of South Florida. A reprint of the article is enclosed.

We have continued to expand our staff to better serve you now and in the future.

Happy New Year to you all!

Singer Xenos Wealth Management