2nd QTR 2006 - News & Events

I hope that you and your families are enjoying your summer!  Please accept my apologies in getting the statements and quarterly letter to you this late in August.  Lisa, the boys and I left for a vacation early August, around the time we would usually send this package to you. 

Enclosed are your 2nd quarter investment reports.  The “Statement of Assets, Summary” shows your total asset balance as of June 30, 2006 and the “Executive Summary” shows your performance as of June 30, 2006, for the prior year and since inception.  We have several other reports if you find that you would like additional information, but from what I hear from most of you, these two reports are sufficient.

To summarize, during the second quarter, the broader U.S. and International markets were down slightly, reducing gains experienced during the first quarter.  Most of these asset classes have rebounded so far, even with the recent news regarding terrorist plots during the third quarter.  We can’t predict tomorrow’s news, and irrespective of what the media and financial advertisements may lead you to believe, no one has a crystal ball.  News drives the markets.  If you can’t predict tomorrow’s news, the most prudent approach to investing is to appropriately diversify your portfolio and utilize lower cost, institutional mutual funds.  We’ve utilized this philosophy combined with the application of the most current “Science of investing”. We believe it is important to stay the course of your investment strategy. 

Below is a representative sample, as of June 30, 2006, of DFA funds currently recommended for use in our client portfolios.  This is not a complete list of all DFA funds, and your portfolio may or may not contain all these funds.  Also below are returns of two indexes, providing you an idea of how the US (S&P 500) and International (MSCI EAFE) markets have performed (also commonly called “benchmarks”).  Note that historical returns are not predictive of future results.

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Fund Name/Ticker 2nd Quarter One-Year Three-Year Five-Year
DFA US Large Co. Institutional Index (DFUSX) -1.39 8.67 11.14 2.42
DFA Tax-Managed US Equity (DTMEX) -2.17 9.16 12.34 N/A
DFA US Large Cap Value III (DFUVX) 1.78 15.91 19.60 9.02
DFA Tax-Managed US Mktwide Value II (DFMVX) 0.30 18.17 20.32 5.97
DFA US Micro Cap (DFSCX) -7.11 15.48 20.45 13.14
DFA Tax-Managed US Small Cap (DFTSX) -5.61 16.17 20.21 9.32
DFA US Small Cap Value (DFSVX) -3.40 19.77 26.50 16.66
DFA Tax-Managed US Small Cap Value (DTMVX) -3.46 19.23 23.95 13.03
DFA International Value III (DFVIX) 0.15 31.34 30.32 15.95
DFA Tax-Managed International Value (DTMIX) -0.01 31.05 29.32 14.73
DFA International Small Company (DFISX) -2.46 27.97 30.60 20.00
DFA International Small Cap Value (DISVX) -2.70 28.16 33.59 23.77
DFA Emerging Markets (DFEMX) -6.45 28.84 31.79 20.50
DFA Emerging Markets Value (DFEVX) -3.95 37.52 41.16 28.82
DFA Two-Year Global Fixed (DFGFX) 1.12 2.88 1.64 2.99

S&P 500 Index -1.41 8.67 11.23 2.50
MSCI EAFE Index 0.70 26.56 23.94 10.02

We’ve Moved!
I hope that you received our postcard with our new contact information.  After moving in Memorial Day weekend and several months of completing renovations, we are settled into our new location in Plymouth.  The location is just 2 blocks from downtown Plymouth, and similar to Northville, is a great location as there are many restaurants and places to shop.  One bonus is that we have plenty of our own parking!  Whenever you come to the office, you may want to plan a few extra hours to stroll around town. 

Now is a great time to schedule your quarterly conference, which can be face to face or via conference call.  Please call Lisa at ext. 102 or Becky at ext. 107 to schedule the appointment.  Please note, that you do not have to wait until the quarterly meeting to contact us, we are available whenever you have questions or concerns.  Also, we haven’t scheduled a formal open house, as yet, but if you’re in the area, please feel free to drop in, take a look around and say “Hi”!  In the meantime, you can reach me directly at 734-737-0866 ext 101, or if you cannot reach me, please contact Becky at ext 107.

Best Regards,

Wayne B. Titus III
CPA / PFS, CISA

Posted by Wayne Titus
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