As the stock market struggles to maintain current levels, companies are increasingly challenged to deliver earnings that justify their stock prices. Because of recent significant losses, prudent investors are looking for other methods to generate growth and protection of capital, but to date have felt limited in their investment choices. Perhaps they are not aware of the various options at their disposal, such as a portfolio of stocks short.

If an investor can achieve either an increase in return or a reduction in risk through the use of a particular investment approach, then this approach should be considered. LAM has developed its own Short-Biased Managed Accounts product that is designed to achieve these goals. This low correlation asset class is an important diversification tool that incorporates a sophisticated, professional and controlled approach to selling short a portfolio of stocks. We do not utilize futures or options.

Initial positions typically represent about 3 to 4% of the value of the portfolio depending upon its size, so a standard account will be well diversified (25-35 securities).

The following returns should give you a basis for understanding what should be expected under various market scenarios. For instance, the first four years witnessed declining markets, and our returns were excellent, both on a relative and absolute basis. On the other hand, the period from 2003 through 2007 witnessed an up market, and because we remained short (which is the objective of this product) the return was negative (although not nearly as negative as the inverse of the market returns). We believe that we are in a period similar to the 2000-2003 timeframe, with all the attendant economic and market problems directly ahead, and that the magnitude of our returns will be quite favorable (hopefully similar to the earlier period). On the other hand, the prospect of experiencing another period similar to the parabolic blowoff from 2003 appear slim. In fact, we do not believe we will again witness such a blowoff for many years.You must decide whether you agree with this assessment.

Short-Biased Managed Account History - Net of Fees 12-31-99 to 06-30-10
Time Period	Composite Return (%)	Dow Jones	S & P 500
12-31-99 to 12-31-03	30.83	-1.90	-19.85
12-31-03 to 12-31-07	-15.31	37.93	41.93
12-31-07 to 06-30-10	21.56	-20.57	-25.61
Inception to Date
12-31-99 to 06-30-10	34.69	7.47	-15.37

Lang Asset Management, Inc.(LAM) is a portfolio manager that invests solely in U. S. based fixed and equity securities. LAM is defined as an independent investment management firm that is not affiliated with any parent organization. Composite has been valued monthly and portfolio returns have been weighted by using beginning-of-month market values plus weighted cash flows. The benchmark is the inverse of the average of the two indices. All indices include dividend income. No alteration of composites as presented here has occurred because of changes in personnel. A complete list of firm composites and performance results is available upon request. It cannot and should not be assumed that future results will be profitable or will equal or exceed past results.

Consultants are increasingly recommending this asset class, similar to their endorsement of international equities as a diversification measure several decades ago.

For additional information and fee schedule click on Getting Started.