Adrian Mastracci, president of KCM Wealth Management, says "Two key market drivers are corporate earnings and interest rates. The Fed increases have provided lots of debate on the interest issues. The latest earnings expectations will unfold starting next week."

Vancouver, BC (July 4, 2006): Investors are wondering what the pulse for the second half of 2006 may have in store for their portfolios.

Winnie the Pooh once said, “Did you ever stop to think, and forget to start again?”

Adrian Mastracci, “fee-only” investment counsel at Vancouver based KCM Wealth Management comments, “These stops occur quite frequently in the markets. Investors get caught up in the excitement of the day, only to miss the big picture.

Let’s put some perspective on the markets with the year over year increases on these indices:

The markets have come a long way in this bull run. Even after the recent correction in practically all major markets, both at home and abroad. But investors still love to worry.

I don’t know where the markets are heading. My best guess is a period of slower growth during the second half. Perhaps, into next year. And, a major correction is also a distinct possibility.

Regardless of what actually happens, I know that investors can only influence how they position themselves with the markets. All too often, however, this is overlooked.

Wise are those investors who learn this valuable lesson early. The key is to prepare for both the optimistic and pessimistic outcomes. Clear the fog. Cover all the bases.

Let me share some ideas on how to accomplish this:

In my view, investment fundamentals are always in style. My core beliefs firmly address three fundamentals:

• First, wealth management is a long-term assignment, not an event.
• Second, invest in quality within a broadly diversified asset mix.
• Third, try to avoid incurring large losses.

I consider risks first, returns later. That builds prudent portfolios. My goal is to keep investors comfortable, as well as to seek a good return.

There is a right way and a wrong way to invest. The right way allows time to work for each investor. I ask where the investor portfolio will be in five to ten years. Not in six to twelve months.

I know that investors who focus on the near term, say less than two years, will likely encounter unpredictable events that can affect portfolio outcomes. Even with professional advice.

I like to concentrate on what is important to investors. I need to understand how investors feel about their money and their future before designing their portfolios.

Investing wealth is a course of action to achieve a personal rate of return. I focus keenly on comfort with investment risks and time horizon.

I also pay close attention to all costs of investments and their tax friendliness. I remove emotional attachments to investments. For me, the mix of assets has the biggest impact on investor portfolios.

I believe passionately in diversification. I like to own a little bit of the rock all around the world. Preferably, in quality investments. In addition, it’s fine to invest the nestegg over a long time.

My tea leaves

Investing has always been and continues to be a long-term journey. The investment foundations have to be strong enough to withstand some market shakes during the journey. More than once.

Two key market drivers are corporate earnings and interest rates. The Fed increases have provided lots of debate on the interest issues. The latest earnings expectations will unfold starting next week.

My reading of the market pulse continues to be a roller coaster. Market volatility will continue to make price adjustments. Between 10% on the upside, and 12% on the downside.

I expect the markets to twist and turn quickly between some panic and exuberance. Inflation, energy, retail sales, jobs, government spending and the US trade gap remain the other top worries.

Money won’t be made every day. The easy money may have already been made. These markets will convert more people into long-term investors.

Investment strategies may need a tweak from time to time. My portfolio goal is to be right more often than wrong.

I welcome your questions, comments and feedback.

NOTE: The information provided above is intended for general informational purposes only. It does not constitute advice for anyone's specific situation. Everyone should always first consult directly with their advisors to determine the appropriateness of any information contained above before taking any action. KCM Wealth Management Inc. assumes no responsibility for any loss or damage arising from the use of, or reliance upon the above information.