April 3, 2011
L a n e A s s e t M a n age m e n t
It is difficult in a period
of sustained market im-
provement to increase
caution in investing. But,
I ask myself, would I
rather be early or late
leaving a falling market.
While the technician in
me says to remain in-
vested, the fundamental
analyst sees greater risk
for downside surprises
than upside.
This would be a good
time to avoid taking on
additional investment
risk without a watchful
eye on emerging trend
and market momentum.
As always, I welcome
your comments and sug-
gestions.
— Ed Lane
Stock Market Commentary
Market Recap
March was a rocky month for the stock mar-
ket. Equity markets took a dive along with the
disaster in Japan, not to mention continuing
turmoil in the Middle East, debt problems in
Europe and inflation in emerging economies.
By the middle of the month, investors shook
off all the bad news, as certain economic indi-
cators showed improvement and investors
seemed to feel the correction was overblown.
 The S&P 500 ended the month basically un-
changed. Emerging markets reversed a
prior slide and ended up almost 6%, perhaps
due to the expectation of commodity
growth as a result of the earthquake and
tsunami in Japan.
The global bond index was unchanged again
 erally) and stock market performance.
reflecting the fact that 10-year Treasury
bond rates were also unchanged for the
month (falling then recovering).
 It was another strong month for silver,
though gold had little change. Oil fell
sharply then recovered.
Economic Outlook
I believe the economic outlook remains se-
verely challenged. While some improvement
is occurring in employment, wage growth and
the Conference Board’s Leading Economic In-
dicators, other indicators (e.g., construction,
housing, capital goods orders and consumer
sentiment) remain weak.
As a reminder from last month’s commentary,
the wind down of QE2 in June worries many
analysts who see a strong correlation between
the Fed’s balance sheet (or credit growth gen-
Investment Outlook
The ultimate driver of stock market perform-
ance is corporate earnings. It is also responsive
to the flood of money (or lack thereof) that
comes government stimulus. At any point in
time, however, the market is making a predic-
tion about future earnings and the prospects
for changes in government stimulus. Some-
times those predictions are wrong. Accord-
ingly, despite the trend in the S&P (which is
showing some current weakness), in the face of
economic and geopolitical headwinds and in an-
ticipation of a slow down in government stimu-
lus, I continue to recommend heightened cau-
tion relative to broad market sectors.
Accordingly, I favor high quality, dividend-
paying equities and sectors that will benefit
from global tension and weakening currencies,
such as energy and other commodities, pre-
cious metals, and securities that benefit from
rising interest rates. As a result of the Japanese
earthquake and the continuing growth in
emerging markets, especially China and India,
global building materials also have a positive
outlook.
For taxable portfolios, I would also give consid-
eration to a well-diversified municipal bond
portfolio. I believe the municipal bond scare
was and is overblown resulting in high current
yields and capital gains down the road. With
current tax free yields at 4% or more, and with
bond prices depressed, an allocation to munici-
pal bonds may prove timely.
 Page 2
L a n e A s s e t M a n age m e n t
S&P 500 Index
The S&P 500 index experienced a minor correction in November at its previous line of resistance, but
bounced back strongly since partly as a result of a reallocation of funds from emerging to the developed mar-
kets. On a technical basis, the 75– and 150-day moving averages remain positive not quite so much as last
month. On the other hand, the MACD (another moving average-based momentum indicator) weakened in
March, but is now showing signs of recovery. The index is still hovering around its new technical line of sup-
port/resistance of about 1300 which gives some reason for caution. At this point, giving due regard to the economic headwinds in the U.S.
and other developed economies, but also keeping in mind the stronger, but overheating, economies in the emerging markets, it is difficult to
be convinced about the sustainability of the current uptrend in the S&P 500. The caution light is out and any additional exposure to U.S. equi-
ties should be entered into slowly and carefully with the understanding that a pullback of 10-20% or so would be consistent with the pattern
established over the last 18 months.

The S&P 500 index is an unmanaged index which cannot be invested into directly. Past performance is no guarantee of future results.
 L a n e A s s e t M a n age m e n t Page 3
Morgan Stanley Emerging Market Index
The MSCI Emerging Market Index had a setback in November and again in January as a result of concerns of
overheating economies and government policy actions to control rising inflation. The 75– and 150-day mov-
ing averages remain flat (without trend). The MACD, a shorter term indicator, is showing some sign potential
improvement, but it is too early to hang one’s hat on this. A positive sign is the retention of the breakout
above the last support line at 1050 while, on the other hand, 1200 is proving to be a difficult line to break
through. Given the generally positive fundamental long term outlook, this may be an opportunity to add to a position for
more aggressive investors. Others may want to wait a bit longer for a confirmed move upwards. I think performance over the next couple of
weeks will be telling for a longer term commitment and we may now be looking at a ―basing period‖ for the next move up. At this time, I sug-
gest investors be cautious of the ―risk-on‖ trade in emerging markets.

The MSCI Emerging Markets index is an unmanaged index which cannot be invested into directly. Past performance is no guarantee of future results.
 L a n e A s s e t M a n age m e n t Page 4
Barclays Capital Global Bond Index
The Barclays Capital Global Bond Index represents the total return (capital gains and interest income) of a
composite of domestic and international government and corporate bonds and similar instruments. As such,
it blends bond yields available globally along with the impact of currency fluctuations. As shown in the chart
below, this index has a steady upward momentum with very low volatility. It should be noted that the per-
formance of the securities in this index has been a beneficiary of declining interest rates and decline in the value of the dollar,
producing capital gains along with interest income. With the expectation that interest rates will be rising in the future, that component of the
total returns in this index will be harder to achieve in the future. On the other hand, there are other components of total return including
higher interest rates abroad and currency movement that can prove beneficial. For the portion of a portfolio where capital preservation has a
high degree of importance and also to provide diversification, an allocation to a global bond portfolio may be appropriate. While a stable or
declining interest rate environment would be positive for this index, the current upward pressure on rates in both developed and emerging
markets does not bode well for this index at the current time. On the other hand, the MACD appears poised for an upward movement in total
return and the next few weeks or months will be quite interesting.

The Barclays Capital Bond—Global Index is an unmanaged index which cannot be invested into directly. Past performance is no guarantee of future results.
 L a n e A s s e t M a n age m e n t Page 5
Gold and Silver
The chart below shows the 5-year monthly performance of gold and silver indexes, along with a comparison of
the performance of a U.S. dollar index. The chart shows an inverse correlation in the price of the metals
against the value of the dollar except for the period November 2009 through May 2010 when the dollar ad-
vanced as did the price of the precious metals. The inverse correlation is understandable as the metals can be
seen as an alternative to fiat currency. But other factors are clearly at play as the metal prices have advanced far more than the value of the
dollar has declined. The primary answer, I believe, has to do with supply and demand imbalances caused by market and geopolitical uncertainty.
If that’s the case, then a good argument can be made for continuation of strong performance in these (and other) precious metals as long as
governments (and others) around the world stockpile these metals as a hedge against future inflation or as an alternative to holding dollars.
That said, as shown in 2008 and as suspected by some today, the value of the metals can be quite volatile and can contract rapidly. An interrup-
tion in the pace of price advances should not come as a surprise and might be taken as a buying opportunity. Therefore, caution is advised when
investing in precious metals.

This chart shows the performance of gold and silver indexes created by stockcharts.com that are intended to represent prices of the precious metals and is a very close approximation to the
value of exchange-traded funds that hold these metals. These unmanaged indexes cannot be invested into directly. Past performance is no guarantee of future results.
 L a n e A s s e t M a n age m e n t Page 6
Year-to-Date Index Comparisons
The chart below shows the 12-month performance of selected indexes. Several observations can be made:
 A high degree of correlation can be seen among the equity markets in the U.S., Europe and, to a lessor extent, in the
emerging markets.
 While performance of the S&P 500 has lagged emerging markets for the last 12 months, the gap is now essentially closed.
 European equities continue to lag other equity markets.
 After suffering the largest decline in the first 3 months of the period shown, oil has rebounded the most strongly and now is just shy of gold
for the highest total return over the entire period as well as the strongest current momentum.
 Global bonds have turned in a respectable performance with low volatility but incremental improvement evaporated over the last 7 months.
 Gold performed extremely well for the first 9 months but began a sharp decline in late December. As suspected, this reversal was not long-
lived.

Past performance is no guarantee of future results.

Page 7 L an e A ss et M an ag em ent
Disclosures
Lane Asset Management is a Registered Investment Advisor with the
States of NY, CT and NJ. Advisory services are only offered to clients
or prospective clients where Lane Asset Management and its represen-
tatives are properly licensed or exempted.
No advice may be rendered by Lane Asset Management unless a client
service agreement is in place.
Investing involves risk including loss of principal. Investing in interna-
tional and emerging markets may entail additional risks such as currency
fluctuation and political instability. Investing in small-cap stocks includes
specific risks such as greater volatility and potentially less liquidity.
Small-cap stocks may be subject to higher degree of risk than more es-
tablished companies’ securities. The illiquidity of the small-cap market
may adversely affect the value of these investments.
Investors should consider the investment objectives, risks, and charges
and expenses of mutual funds and exchange-traded funds carefully for a
full background on the possibility that a more suitable securities trans-
action may exist. The prospectus contains this and other information. A
prospectus for all funds is available from Lane Asset Management or
your financial advisor and should be read carefully before investing.
Note that indexes cannot be invested in directly and their performance
may or may not correspond to securities intended to represent these
sectors.
Investors should carefully review their financial situation, making sure
their cash flow needs for the next 3-5 years are secure with a margin
for error. Beyond that, the degree of risk taken in a portfolio should be
commensurate with one’s overall risk tolerance and financial objectives.
The charts and comments are only the author’s view of market activity
and aren’t recommendations to buy or sell any security. Market sectors
and related exchanged-traded and closed-end funds are selected based on his opinion
as to their usefulness in providing the viewer a comprehensive summary of market
conditions for the featured period. Chart annotations aren’t predictive of any future
market action rather they only demonstrate the author’s opinion as to a range of pos-
sibilities going forward. All material presented herein is believed to be reliable but its
accuracy cannot be guaranteed. The information contained herein (including historical
prices or values) has been obtained from sources that Lane Asset Management (LAM)
considers to be reliable; however, LAM makes no representation as to, or accepts any
responsibility or liability for, the accuracy or completeness of the information con-
tained herein or any decision made or action taken by you or any third party in reli-
ance upon the data. Some results are derived using historical estimations from available
data. Investment recommendations may change without notice and readers are urged
to check with tax advisors before making any investment decisions. Opinions ex-
pressed in these reports may change without prior notice. This memorandum is based
on information available to the public. No representation is made that it is accurate or
complete. This memorandum is not an offer to buy or sell or a solicitation of an offer
to buy or sell the securities mentioned. The investments discussed or recommended in
this report may be unsuitable for investors depending on their specific investment ob-
jectives and financial position. The price or value of the investments to which this re-
port relates, either directly or indirectly, may fall or rise against the interest of inves-
tors. All prices and yields contained in this report are subject to change without notice.
This information is intended for illustrative purposes only. PAST PERFORMANCE
DOES NOT GUARANTEE FUTURE RESULTS.
Periodically, I will prepare a Commentary focusing on a specific investment issue.
Please let me know if there is one of interest to you. As always, I appreciate your feed-
back and look forward to addressing any questions you may have. You can find me at :
www.LaneAssetManagement.com
Edward.Lane@LaneAssetManagement.com
Edward Lane
Lane Asset Management
P.O. Box 666
Stone Ridge, NY 12484