Our 2003 Year End Report to Lakeside Capital Clients

We believe the most important financial decision you can make is to grow your Net Worth. No, not stock market growth nor real estate growth, Net Worth growth. You see, when it comes time to live off your investments, we have educated our clients to the importance of their net worth. One can live off of 3-5% of their net worth with minimal impact to their assets.

We suggest client’s aim for 10% net worth growth annually. This net worth growth needs to be consistent and can be any combination of asset appreciation, debt reduction, or savings. It is only by growing your net worth that you can be certain you will have the funds when you really need them. If your stocks earned 30% after losing 25% the year before, you are just back to even. If your portfolio lost 5% the previous year and gained a more modest 15% this year you have 9% more than the aggressive investor. For this reason, the majority of Lakeside Capital clients prefer the 60/40 benchmark, thereby reducing volatility, diversifying among different asset classes, and more predictable growth for the years to come.

As in the past, we will continue to seek out individualized strategies and different asset classes to help our clients achieve their Net Worth goals.

For 2004, our mantra continues to be:

“ It is the avoidance of large losses that creates wealth over the long term.”

We thank you for your continued confidence in our work and look forward to a long and prosperous association.

Sincerely

Dennis H. Daugs Jr
Jeffrey E. Flohr
Managing Directors