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Third Quarter 2009

The market rally continued in the third quarter as investors became more confident that the economy was on its way to recovery. The Dow Jones Industrial Average level of 950 had been a point of resistance in the prior quarter but it was quickly bypassed early in the quarter and all pullbacks were quite mild. All sectors were positive for the quarter with financials once again leading on the upside. On a relative basis, the Nasdaq Composite was the best-performing index gaining 15.91 percent. The S&P 500 Index produced a gain of 15.61 percent. The Dow Jones Industrial Average lagged with an advance of 14.98 percent. The Federal Reserve’s quantitative easing policy appears to have succeeded in stimulating the economy. With a gain of 25.14 percent, financials was the top sector. Industrials was the second-best-performing sector with a gain of 21.24 percent. Materials were third as some of the paper and chemical stocks outperformed. The lagging sectors were those traditionally defined as safe havens--telecom services, utilities and healthcare. All three sectors were positive for the quarter. Their underperformance was a reflection of investors’ rising risk appetite as the markets moved higher. Mid-cap stocks outperformed large- and small-cap stocks during the quarter. Value stocks outperformed growth stocks. The All American Equity Fund underperformed its benchmark, the S&P 500 Index for the quarter.

As we ended the quarter, some headwinds may hold the market back. These include the price of oil, increasing government regulation and the outlook for earnings for the remainder of the year.

Past performance does not guarantee future results.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. The Dow Jones Industrial Average is a price-weighted average of 30 blue chip stocks that are generally leaders in their industry. The Nasdaq Composite Index is a capitalization-weighted index of all Nasdaq National Market and SmallCap stocks. The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies.

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