Dear Shareholders,

Over the last several weeks I have received numerous phone calls expressing concern over
the direction of the Congressional budget debate. My advice has been, and continues
to be, just sit tight. With respect to your investments, don’t make any
changes; this too will pass. Most of you have been investors with us for many
years. Together we have been through many trying “events.” In hindsight it has
always been a mistake to sell stocks and give in to the prevailing emotion, and
in fact, as long-term investors it is usually an opportunity.

As stupid and frustrating as it may appear, there is a silver lining to the Congressional debate. If Congress had just automatically
increased the debt ceiling, like they had in the past, without addressing our
spending problems, it would have been a real negative.  At least now they are not ignoring our
problems.

Looking forward, I would refer back to my letter from last
month. We have not changed our optimistic outlook that 2011 will be a second
half year yielding double digit returns by December 31. We ended July with the
stock Growth & Income Fund up 4.4% which compares with the S&P 500
index up 3.8%.

Interest Rates/Income Fund

There has been little movement in interest rates throughout
the debt debate. The Elite Income Fund is up 3.4% for the seven months through
July which compares favorably with the Lipper Short-Term and Intermediate-Term
bond indices up 1.9% and 3.9% respectively.

Feel free to call with any questions or concerns.

Warm Regards,

Dick McCormick

NAV Value as of July 29, 2011:

Elite Income Fund – $10.71

Growth & Income – $16.00