I still have a relatively large cash position due to a dollar-cost averaging strategy. This strategy is designed to take advantage of fluctuations in the market price of an investment. By investing the same amount of money into a security at regular intervals over a period of time, you can lower the average cost of the investment in a gradually rising market and avoid the guesswork of trying to time the market. It is an effective way for an investor who can continue investing through changing market conditions to accumulate shares in a fund to help meet long-term goals.

With the war behind us and corporate profits coming in better than expected, the equity market has staged a strong recovery. At the same time, a renewed focus by investors on deflation led to an equally impressive rally in the bond market, with interest rates dropping to multi-decade lows. While the stock market is likely to continue to be volatile, the more stable international situation along with signs of an improving economy and better corporate profits should provide support to the equity markets. A vigilant Fed should also keep interest rates from rising over the near term.

Having just returned from Japan, I found no reason to have exposure to Asian equities or debt instruments. SARS fears and economic stagnation continue to weigh heavily on all Asian economies. My portfolio has been more volatile than anticipated. The neurotic basket case, Imclone, continues to rise despite the numerous problems plaguing the company from the past management. The upcoming ASCO meeting will dictate holding the stock or making a quick exit. Stay tuned. I am currently holding about 38 percent in cash looking for a good opportunity. There is nothing that I see as an overwhelming buy right now, hopefully that may change.

The stock market continued to rise in May, as a trifecta of events led investors to conclude that economic growth would accelerate soon. Congress passed a sweeping tax cut, and cut taxes on dividends. Treasury Secretary Snow officially gave his blessing to a weaker dollar policy, giving American corporations more flexibility in raising prices. Chairman Alan Greenspan reiterated that the Fed would do whatever is necessary to avoid deflation. For the first time in several years, the macroeconomic environment is favorable toward equities. We continue to remain constructive on stocks, as the three-year-long bear market has finally ended.

With some volatility and periodic profit taking, the focus of the financial markets has transitioned from geopolitics, to the U.S. economy, taxes and corporate financial health.ÊThe "hub and spoke" structure of our portfolio has benefited from the core index position and broad based mutual funds, as well as the surrounding specific company positions.Ê This approach, over time, maintains a stable center, reduced risk, along with the flexibility to seek out developing areas of strength in a dynamic economic process.ÊIt combines a "buy and hold" dimension, with a more active management element that seeks to periodically realize modest gains.

Due to the 15-year time frame of this investor, the focus should be less on the day-to-day movement in the stocks owned, and more toward other aspects of creating a sound financial plan. When planning for retirement, the more important question is: Are you saving enough? A comfortable retirement is not determined by age, but how much income will you need to retire, at what lifestyle? The earlier you check, the better. Inflation is an extremely important factor, especially if you retire early. During the next few months, I'll be discussing other considerations you should be addressing with your advisor.