Market & Economic Brief

There are significant risks and opportunities in today's investment markets. Dightman Capital believes the key to success in today's environment is to remove entrenched investment biases and implement a dynamic investment process and execution ability.

Summer 2010

GLOBAL INVESTMENTS
Dightman Capital expects stock markets to continue trading between price levels experienced between 2007 and 2009 for the foreseeable future. The alternating up and down price movement could be biased to the downside based on risks associated with deleveraging and demographic shifts. Some emerging market countries may represent better investment opportunities based on more favorable economic conditions.

WORLD ECONOMY
Dightman Capital believes we are in an environment where debt reduction in developed countries, lack of debt creation in emerging countries, and regulation hazard pose serious challenges for the global economy. Government fiscal and monetary policy is likely to underperform with potentially aggravating effects on both periods of economic growth and decline.

INFLATION DATA
We believe broad inflation pressure appears to be contained and interest rates will remain very low for a sustained period. Deflation may become the dominant problem if economic growth does not pick-up.

U.S. RESIDENTIAL HOUSING
After improvements in late 2009 and early 2010, the residential real estate market appears to have slowed after the expiration of the home buyer credit at the end of April in most U.S. markets.

PLANNING
New conversion rules for ROTH IRA's in 2010 may present a unique planning opportunity.

Potential tax changes in 2011 are reason to review tax strategy in 2010.