Year-to-date up 3.3%

                                        Actual     Target

Cash, Bills, Notes, Bonds                            34%

Cash & equivalents                        1.9%

Treasury inflation-protected securities  26.6%       24%

TFI                                       3.8%

Salon note                                1.9%

Global Real Estate; Commodities                      33%

VNQ                                      10.7%       10%

RWX                                       7.9%        8%

PCH + PCL + RYN                           4.8%        5%

PCRIX                                     8.8%       10%

Global Businesses & Infrastructure                   33%

VYM                                      10.0%       10%

PID                                       8.4%        8%

PSP                                       5.0%        5%

IGF                                      10.2%       10%

Sold 100% of WPS. Used proceeds to purchase RWX. (Tax loss harvest complete.)

Sold 100% of ACAS, AINV and MCGC. Used proceeds to purchase PSP. (I was increasingly uncomfortable overweighting the small-cap value/private equity sector using individual stocks, so I took the loss and converted to PSP.)

---------------

ACAS    American Capital Strategies Ltd

AINV    Apollo Investment Corporation

IGF     iShares S&P Global Infrastructure Fund

MCGC    MCG Capital Corporation

PCH     Potlatch Corp

PCL     Plum Creek Timber Co Inc

PCRIX   PIMCO CommodityRealReturn Strategy Fund

PID     PowerShares International Dividend Achievers ETF

PSP     PowerShares Listed Private Equity ETF

RWX     SPDR DJ Wilshire International Real Estate ETF

RYN     Rayonier Inc

TFI     SPDR Lehman Municipal Bond ETF

VNQ     Vanguard REIT Index ETF

VYM     Vanguard High Dividend Yield ETF

WPS     iShares S&P World Ex-U.S. Property ETF

Mike