President's Message

In light of the recent downgrade of US debt to AA+ from AAA status by S&P ratings services, the market is in a correction phase and buyers have sat on the sidelines. This is in addition to last week's sell-off of the equites market, causing a true 15% correction from April's highs. This is  very common after markets experience large gains which we have experienced since the March 2008 lows which were caused by the financial/mortgage debt crisis. However, current situations dictate more longer term concerns as the US struggles with its deficit spending and our government 's mishandling of the recent debt ceiling issues. The recent downgrade was expected, albeit somewhat earlier than economists anticipated.

We at Strategic Financial Planners are monitoring the current economic enviroment and believe that we will experience market volatility over the next 2-3 months. We do not believe that we are headed into another recession and are still bullish on the US equity markets moving forward. This correction/sell-off presents a long-term buying opportunity and is not a cause for a massive sell-off. Earnings for the 2nd and 3rd quarters are expected to be at or above expectations and profitibility for most companies remains very attractive. We expect a strong finish to the 4th quarter and expect to end the year slightly positive.

The concerns we have and have had for the past 12 months lies in the US Debt markets and with growing concerns of the US being able to continue to meet their current and future obligations. This is why the S&P recently downgraded our bonds. This will inevitably cause interest rates to rise and increase the costs for everyone seeking financing, a negative scenario for consumers and businesses seeking lending. For our bond & bond  fund holders, this will cause a depreciation in pricing moving forward.

In preparation of this event, we have been purchasing, for some time, shorter-term maturity bond holdings and have limited our portfolios exposure to longer-term maturities thus reducing the risks associated to rising interest rate exposure. We have utilized insurance products using fixed-indexed and variable annuities with income protections riders to also minimize our clients exposure.

In closing, we believe that the US dollar is still the only reliable and stable global currency and spikes in the price of Gold represents an inevitable price bubble that will eventually burst. We expect this correction to last several more months and that the markets will return to its upward track heading into 2012. We will continue to monitor and manage our clients money appropriately and continue to minimize their exposure to longer-term volatility whenever possible. Keep in mind that your goals are longer-term goals and fluctuations in the value of your accounts shorter-term have less impact over time.

Respectfully,

George R. Siracuse,

President