Quality Growth Stocks

Schultz Financial Mgmt Corp

Risk-Controlled Portfolios for Serious Investors

Folio Statistics

(As of 12-30-2005)

	Quality Growth	S&P 500 Index
2005 Return	5.31%	4.90%
2004 Return	18.04%	10.71%
2003 Return	33.35%	28.70%
2002 Return	-20.48%	-22.23%
2001 Return*	10.49%	8.06%
Dividend Yield	1.13%	1.81%
PE Ratio	21.23	16.78
Volatility	12.76	11.19
Beta	1.05	1.00
Market Cap	91.6 bil	74.1 bil

*Since Inception Date: Oct. 9, 2001

Investment performance figures from 2003 are based on actual results of a representative client. Results prior to 2003 are those of our model folio account since its inception. These figures do not include our investment management fees.

Objective:

This folio is managed to achieve long term capital appreciation, with little consideration to income. The volatility of this folio will be similar to that of the S&P 500 index.

Investment Approach:

First, we narrow our candidate list of stocks to quality US companies that are current market leaders in favorable industry groups. Based upon a stock ranking system, we will buy the highest ranked stocks from our candidate list. The stocks in our candidate list have ranks or scores between 0 and 99 depending on value and growth characteristics based upon:

	Wall Street analyst consensus earnings revisions
	Actual earnings surprises
	Earnings consistency
	Earnings growth / acceleration
	Reasonable valuations
	Price Relative strength

We attempt to buy stocks in a very timely manner and achieve above average performance soon after the purchase. Unless the stocks performs exceptionally well in the first 3-6 months, it will be likely be sold in favor of another another replacement stock that is considered to be a more timely "buy".

For the purpose of risk control, If a company reports bad news that that causes a large price decline of 6-10% or more on high trading volume, we will sell the stock and replace it with another high rated stock.

Stock Candidates

To qualify as a candidate for consideration in this folio, a company must have a market capitalization above 10 billion and be one of the current market leaders in an above average performing industry group.

Current market leaders are considered to be companies with strong earnings growth and strong relative strength compared to the overall market.

Stock Ranking System

If the stock rank of a company in our folio drops below the 30th percentile, we will sell the stock, and replace it with the highest ranked stock in our current candidate list that we don't currently own (subject to sector limits that we have established).