Dear Investor:

Very near the end of the quarter, a triple threat of events occurred that put investors into a more conservative mode. The long awaited possible Greece removal from the Euro nations, China’s overheated market hiccupped, and a Puerto Rican default hit the headlines. We were actually pleasantly surprised market participants were not more restless.

Earnings

As mentioned in greater detail in our Q 3 Newsletter, which is hot off the presses now, USA earnings, the “Mother’s Milk” of higher stock prices are expected to be very meager, if any, for 2015. With a pause in earnings growth, frothy valuations and the afore mentioned headlines, markets may continue to have a more conservative tone.

Interest Rates

We continue to believe the Federal Open Market Committee (FOMC) will raise rates later this year. While not making headlines at the moment, this may turn out to be the bigger story for the year 2015. It has been nine years since the FOMC has raised rates, and we think the near zero rate environment has overstayed its welcome, and is doing little to help our economy at this time.

Higher rates, MAY be a headwind initially to both equity markets and fixed income, however longer term higher rates may produce a better economic environment.

Summer Doldrums and the Election

Smack in the middle of summer doldrums, many “Wall Streeters” have already headed to their favorite summer retreat, leaving greener hands in control. Combine a heavier than normal summer doldrums, along with Election headlines, we may have a few bumps over the summer. Not to worry, diversification is especially our friend during times such as these.

Have a great rest of your Summer!

Sincerely,

John A. Kvale CFA, CFP

Enclosure (Q2 2015 Performance Report)