Investment success comes from consistently following a strategy
that matches your individual needs for growth and income, while balancing your
tolerance for risk. Hamilton-Bates Investment Portfolios employ one of two
general methodologies; Strategic Asset Allocation or Tactical Asset Allocation,
each with its own set of characteristics and appropriate depending upon an
investors objectives and risk profile.

TACTICAL ALLOCATION

Portfolio diversity reduces risk, but at a cost. When you combine
the returns of many asset classes, the resulting average return must always be
less than the return of the top-performing asset. If the best asset class earns
record returns, as stocks did in the 1990’s, the resulting shortfall in a
broadly diversified portfolio could be significant. Through Tactical Asset
Allocation, the portfolios are over-weighted in those asset classes expected to
do well. The Tactical Asset Allocation Portfolios may at times be
non-diversified among asset classes.

Tactical Asset Allocation endeavors  to be invested in the most favorable asset classes at any given time, while avoiding those with unfavorable risk/reward characteristics. The strongest asset  classes are selected from among equity and fixed income categories using trend  quality, relative strength, and macro-economic analysis. By identifying the  strongest (anticipated) asset classes, the portfolios can then be positioned in  those areas that represent the best opportunity for growth.

Tactical  Asset Allocation is an active process which is designed to concentrate
investments in leading asset classes.

There are six portfolio options in the Tactical Allocation Program, based on investment objective and risk tolerance. Typical asset class breakdowns are shown. Investment positions can and will vary based
on economic conditions. The ranges shown are benchmarks.

Asset Class Ranges ( The 'Stocks' category includes international as well as domestic stocks, while 'Bonds' includes cash equivalents).

STRATEGY SUMMARY 

The Tactical Asset Allocation Program identifies those
asset classes with strong appreciation potential. The available mutual fund
universe undergoes an investment style analysis to insure it reflects the
appropriate asset classes recommended. Once the mutual funds are selected, the
portfolio is implemented. The portfolios are monitored continuously, and the
portfolios are re-balanced as often as the financial markets and the HBIR models
dictate. The mutual funds within those portfolios are also regularly reviewed to
insure investment style consistency, and adjustments are made if necessary. In
addition to their regular statement they receive directly from the funds,
clients receive a Quarterly HBIR Account Statement along with a newsletter
detailing the current financial market outlook.

The Tactical Asset  Allocation Portfolios are appropriate for most investors seeking long-term
capital growth. Investors seeking current income, balanced portfolios, or
substantially reduced volatility should consider the Strategic Asset Allocation
Portfolios. Tactical Asset Allocation Portfolios can hold concentrated asset
positions at times, and while this enhances potential investment returns, it can
also increase portfolio volatility. The Tactical Asset Allocation Portfolios are
well-suited for long-term investors seeking capital appreciation.