Last Quarter Round-Up

J U N E 3 0, 2 0 0 8

Say Hello to summer. Here it is the end of June and the weather has that distinctively sticky August feel to it...including the late afternoon storms. No complaints though, I'll take the hot weather any day. I hope you are enjoying the season that always seems too short.

Let me bring you up to speed on the fundraising event my wife and I have been working on for several months. The cause is part of the Northwest Community Foundation called the Critter Fund. The Critter Fund was established to provide support to organizations that provide for the care and well being of animals. My wife and I have two dogs we rescued. One from a shelter that struggles to stay afloat and avoid putting pets down. Sandra and I are committed to helping. Fortunately, the Community Foundation now has the perfect vehicle to allow us to help the local organizations that help animals. The event is scheduled for Saturday, September 20th and will be held at the Bunnell Farm in Litchfield. Our theme is a Barn Dance and we're getting ready to put on quite a show. If you are interested in attending, or better yet becoming a sponsor, please contact me.

There's a change in the air. We seem to be moving away from what was an uncertain economic atmosphere with significant positive and negative market volatility. The mood now is much more negative. Even with GDP numbers revised higher for the first quarter, the overwhelming sentiment is that we are in a recession. And that sentiment is driving the markets down as investors expect corporate profits to fall. Add to that more inflationary pressures (as I mentioned back in Q3 2007) and a falling dollar and the stage is set for the near bear-market correction we've experienced. The S&P 500 closed the quarter down -3.23%, while the Lehman Aggregate index was down -1.02%. Our equity strategy last quarter favored large cap stocks and growth while underweighting small caps and value. The fixed income strategy favored inflation-protected and high-yield while underweighting short bonds and holding steady with long bonds. Quarterly asset class results: Large Cap -2.40%; Small Cap +0.03%; Growth +3.78%; Value -6.15%; Inflation-protected bonds -1.29%; Long bonds -3.29%; Short Bonds -1.39%; Hi-Yield -3.13% (see Notes)

Global Economic Outlook

I happen to believe much of the current climate can be attributed to skyrocketing oil prices. I further believe that options exist to address what I believe is over-speculation in commodities. But with an election just a few months away, don't count on any action from our government. That said; my investment strategy won't change much. For equities, focus on growth while reducing international and emerging market exposure. The fixed income strategy will change somewhat this quarter. I favor inflation-protected bonds, and intend to hold on high-yield and long bonds. For the first time in a long while, I will increase cash positions slightly. Extra liquidity in this market seems prudent. I expect the housing turmoil to continue, but the rate of digression to slow. Although far from a recovery, the bleeding in housing must slow to have any chance of seeing the bottom. With inflation worries increasing I don't expect any more rate cuts, however rate increases are unlikely until after the election. It's a "steady as she goes" Fed policy.

What happened to Financially Speaking?

I apologize for not sending out the first issue of my new e-newsletter, Financially Speaking. Time and editorial issues got in the way. However, it will be out this quarter...I promise. This newsletter will be more focused on what I feel are interesting and timely topics dealing with finance, investments or the economy. It will feature an email address where readers can send questions, comments or suggest topics. I can't wait to read all of your input.

Upcoming Seminars:
College Planning: Thursday, September 25th, Lakeville, CT
please email me or call (860) 489-0432 for details.

Visit Our Website:
www.barronfinancialgroup.com

Notes: Asset class & style returns are based on the price-only performance of ETF's & ETF blends with similar respective focus. Asset class and Style results do not reflect the performance of Barron Financial Group, LLP's advisory accounts. Advisory accounts may not contain these investment strategies and may contain investment strategies not described here. Advisory services include asset management fees that are not reflected in these results. Please contact Barron Financial Group, LLP for more information about specific asset class, style or portfolio returns.

Barron Financial Group, LLP is an Investment Advisory firm
registered with the CT Department of Banking

Non-Advisory Securities offered through
Purshe Kaplan Sterling Investments, member FINRA/SIPC
headquartered at 18 Corporate Woods Blvd., Albany NY 12211