COMMON STOCK

Independent research starts with a quarterly analysis of the economy and a fundamental valuation of the overall stock market. This guides our specific research to companies that have favorable underlying economic trends and reasonable valuations relative to the overall market. A comprehensive analysis of company operations and financial statements ensure conformity with quality criteria. Emphasis is also placed on traditional, time-tested valuation techniques and criteria established and published by Earl M. Foster.

Stocks generally have a Standard & Poor's quality rating of B+ or better. However, up to 25% of the stocks may be in companies that are either non-rated by Standard & Poor's or have a rating below B+. For those exceptions, the investment will still be consistent with account objectives and satisfy other measures of investment quality.

Companies that have above-average dividend yields and are "under-valued" by traditional criteria represent the "cornerstone" of the Company's investment philosophy. Industry and company diversification ensure that no single holding has undue influence on the performance of the overall portfolio.