Welcome to the MONEYLETTER Hotline for March 19, 2008

Another week and another 400-point day, with a 300-point counter day thrown in as a bonus. Which one is the real market? We do not think either is. Clearly we are in the midst of major portfolio adjustments being made by institutions. Today we saw major selling in the commodity sector. Nothing changed between yesterday and today, but some institutions decided it was time to take profit in gold. Were they forced to do it? Who knows? But as profit was taken in gold, we saw profit then being taken in oil. And this set the market off.

Both gold and oil had run up sharply in the past few weeks. The reason we were told was the weak dollar. Is the dollar about to have a bull run? We doubt it. No, today was pure profit taking, for whatever reason. As we see it, Tuesday's market was much too frothy, but it was closer to our sense of where the market should go than today's. We think the Fed and Washington are slowly working their way to undoing the credit crunch. Confidence is shattered and rebuilding it takes time. We know the volatility is difficult to endure, but we believe patience will be rewarded.

There is no change in our recommended allocations.

New Fund Ratings – For domestic stock funds, two funds are now rated Buy: Hussman Strategic Growth and American Century Select (closed). Two funds are now rated Hold: Federated Kaufmann Fund and American Century Vista. Two funds are now rated Sell: Wells Fargo Advantage Growth and Artisan Midcap. For international stock funds, Driehaus International Discovery is now rated Hold. Three funds are now rated Sell: Powershares Golden Dragon, Fidelity Southeast Asia, and Matthews China.

Fidelity Southeast Asia is in the Fidelity family Venturesome and Moderate model portfolios. In the Fidelity Venturesome portfolio we will switch the fund into Fidelity Europe. In the Fidelity Moderate portfolio the switch will be into Fidelity Global Balanced.

The Economy – The economy is sputtering, if not reversing. But the numbers are still consistent with a mild recession and not anything worse. Certainly the Fed is doing its best to see that such is the case. As the Fed cut rates yesterday it warned that economic growth would be very slow at least for the first half of the year. We see the Fed as doing what is necessary. We expect a further cut in rates.

The Stock Market – Today was disappointing. We had hoped for a follow-through. But we take some comfort from today's commodity profit taking. The pattern of the past few weeks is breaking up. We take that as a positive sign. We continue to favor equities.

The Bond Market --

The Select Portfolio – There is no change for this portfolio.

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