"The best things in life aren't things." A note from the desk of Bloomfield Hills, MI planner Marilyn Dimitroff.

There sure is a lot going on in the world these days. Iraq has been liberated by a very brave, very courageous group of American and British military professionals, who now face the worrisome task of supervising the formation of a new government in one of the world's real pockets of turbulence. On the business front, earnings season is in full swing, with largely positive results being reported by public companies through the last week of April. Closer to home, Dare County is one big construction site, as the entire world, it seems, wants in on our little strip of sand.

In this issue of Investor's Corner I'll answer reader mail, talk about developing an investor risk framework, update the performance of a model portfolio, and pass along some notable quotes that have recently caught my eye. Feel free to write me at will@darecapital.com with your comments, questions, or feedback about Dare Capital and Investor's Corner.

1. Reader mail--

A. Dear Will, good job on the forecast (February 28 column) regarding oil prices! How do you think the liberation of Iraq will affect ongoing French-US relations? Signed, Tom

Dear Tom, thanks for writing. The war premium on oil has largely gone away, with oil at $26 a barrel as of this writing (April 24). As it turns out, the "war scenario" of 1991's Persian Gulf crisis as played out in the oil commodities market was repeated this spring, albeit not as abruptly as 1991 once fighting began. There is still a significant amount of uncertainty regarding the region's economic and political future, though-so fairly robust commodity price swings will probably continue, in the short term at least.

With regards to US-France relations, subscribers to my e-newsletter can attest to my strong feelings on this issue. My gut feeling is that the French have made a HUGE mistake that will have severe negative ramifications going forward. The affects will be felt in French exports, tourism, and in the diplomatic world. Bill Mann summed it up nicely on the Motley Fool website (www.fool.com) when he noted, "Frenchness is now a liability, and …brand equity can be a fragile thing." Just ask the Dixie Chicks.

B. Dear Will, what is the difference between a fee-only financial planner and a stockbroker? Signed, Vickie

Dear Vickie, thanks for your question. The difference between "fee-only" planners/advisors such as myself and "fee-based" or commissioned advisors such as most stockbrokers is one of how we are compensated, but it goes deeper than that.

Traditional stockbrokers, insurance agents, mutual fund advisors, etc. are financial products salespeople-employees of or agents for a company, compensated by the company for placing client funds into that company's investment vehicles.

Fee-only financial planners and advisors are compensated solely by the client at the time of service. That allows the advisor to work entirely in the best interests of the client, providing objective advice free of product quotas, ill-suited investments that pay a hefty commission, mediocre mutual funds, and the "hot stock of the day."

In addition, many fee-only planners focus on "life planning", working a financial framework into a client's larger set of values and life goals-in effect serving as a financial coach as well as advisor.

More information on this subject is available at the National Association of Personal Financial Advisors (NAPFA) website, www.napfa.org, a "fee-only" planning organization. I am currently in the process of joining NAPFA.

2. Developing a Risk Framework-My true interests (and the reasons I am in this line of work) are capital management and helping people. I spend a lot of time each week researching investment options, seeking constantly refine my "process" of asset allocation, portfolio construction, risk/volatility management, and learning to tailor the process to different clients' needs. It is fascinating stuff, plain and simple, is a service that every investor needs and is a process that pays huge emotional dividends, especially in a bear market.

The old saying about "protecting yourself from yourself" is especially applicable to the process of investing. Combine uncertain time horizons with unfamiliar products, variable investment return outcomes, and confusing terminology, and even the most seasoned investor can get a little flustered. Investors can smooth out the ride and maybe sleep better, too, by developing a risk framework for their investments.

Entire books have been written on the subject of risk management and asset allocation, so our discussion here can only scratch the surface of the subject. A risk framework will identify investment objectives, identify an appropriate client investment risk level, and target selected asset classes. A formalized investment policy statement can then be written to provide specified investing guidelines for the portfolio, including strategy, fiduciary duties, and rebalancing procedures. A risk framework will help to cushion investors against buying or selling at just the wrong time. In short, a risk framework is an absolute investing necessity!

3. Model Portfolio update-Dare Capital Management maintains four model portfolios. Three of the portfolios are equity common stock portfolios. My feeling is that there is a place for a thoughtfully constructed, low turnover common stock portfolio in the equity portion of selected clients' investment allocation models.

The Challenge Portfolio came about in early 2003 in response to a challenge from an advisor friend. He basically said that it was impossible for an "active manager" to beat the market over time. I love a good challenge, so I took him up on it. So far, so good!

The Challenge Portfolio is benchmarked against the S&P 500. We began tracking the portfolio on Jan. 15, 2003, just prior to a nasty market decline. Through April 24, 2003 the portfolio had a total return including dividends of 0.5%, out-performing the S&P 500 by just over 1% on a total return basis. The five largest holdings in the portfolio as of April 24 include Dell Computer (DELL), savings and loan giant Washington Mutual (WM), retailer Target Stores (TGT), Real Estate Investment Trust Equity Office Properties (EOP), and First Virginia Bank (FVB).

4. Notable Quotes:

"I can only speculate at this point, but I suspect that financial planners who…help their clients build their own portfolios and write investment prescriptions, and who focus on providing increasingly personal planning services, …will define the next killer business model."-- Bob Veres, "Inside Information," February 2003

"Churchill wrote his own speeches. When a leader does that, he becomes emotionally invested with his utterances. If Churchill had had a speechwriter in 1940, Britain would be speaking German today." --James Humes, from Forbes, April 28, 2003

"To refer to a personal taste of mine, I am going to buy hamburgers the rest of my life. When hamburgers go down in price, we sing the Hallelujah Chorus" in the Buffett household. When hamburgers go up, we weep. For most people, it is the same way with everything in life they will be buying- except stocks. When stocks go down and you can get more for your money, people don't like them anymore."--Warren Buffett

"Sad to say, retail brokerage is a business that, almost by definition, caters to a client class that typically wants to do the wrong thing at the wrong time."--Holman W. Jenkins, Wall Street Journal, April 16, 2003

5. Market metrics-

Chart is courtesy of and with thanks to Fixed Income Securities and Stone and McCarthy

Will Woodard is president of Dare Capital Management & Advisory, a Registered Investment Advisor and fee-only financial planning firm based in Kill Devil Hills. Dare Capital is committed to providing independent, objective, and professional financial advice. Mr. Woodard, his firm, or his clients may own the investments mentioned herein. Contact Will at (252) 480-0156 or e-mail Will@darecapital.com

The fine print: This newsletter can be reprinted or forwarded--however, it is requested that reprints of any material in this newsletter include credit to Dare Capital Management and Advisory (252)480-0156 and an email link to will@darecapital.com. Thanks for spreading the word!

All of the foregoing is commentary for informational purposes only. All statements and expressions are the opinion of Will W. Woodard, III and Dare Capital Management and Advisory, and are not meant to be a solicitation or recommendation to buy, sell, or hold securities. Mr. Woodard, his firm, or his clients may own the investments discussed in this newsletter. Past performance is no guarantee of future returns.

The information presented herein and the company's web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future results may vary for many reasons.

Copyright 2003 Dare Capital Management and Advisory-all rights reserved.