(text of email sent 09/09/09)

As you know, we establish long-term strategic asset allocations for your portfolio. These reflect your investment horizon, risk tolerance, financial objectives, and other considerations, and specify the percentage of your assets that we invest in various asset classes, such as fixed income, equity, and alternative investments (and various sub-sectors within those broad classes). Within that strategic framework, we occasionally make tactical decisions, based on short-term market considerations. We have made an unusual number of these tactical adjustments in the last year, reflecting the very unusual economic and financial circumstances we have encountered. We are in the process of making another set of tactical adjustments this quarter.

First, we are continuing the migration from so-called “long only” commodity index funds, which directly follow commodity prices, to “long/short” funds, which tend to do well during protracted increases or decreases in commodity markets. We believe this is a safer way for you to navigate the inherent volatility in commodity markets.

Second, we are adding two new mutual funds to the alternatives class. One is a “market neutral” fund, which is a long/short equity fund. It seeks to produce capital appreciation while having a low correlation to the US equity market. The other is an “absolute return” strategy fund, which invests in a diversified mix of mutual funds and ETFs that, in turn, invest in equities, bonds, commodities, and currencies. Our intent with both investments is to improve your portfolio diversification with low-correlated assets that also tend to hold their value when markets decline.

Third, we are accelerating your return to emerging market equities, particularly as respects Brazil.

We continue to explore “safety net” protection for your portfolio as a whole (as described in earlier bulletins), but such protection is still being priced prohibitively high.

In the fourth quarter, we will be completing our periodic comprehensive review of our overall strategic asset allocations themselves, and will report any notable changes to you then.

And, of course, we will maintain our ongoing vigilance over your portfolio.

As always, if you have any questions, please do not hesitate to ask.

Your team at Brinton Eaton