Here we are at the mid-way point in the year. Christmas is right around the corner, snow, cold temperatures and a hoped for stock market rally.

I'm beginning to sound like I may be blubbering a tad. Let us move on.

We are now into the second half of the year and while not spectacular in nature, the stock market seems to be having its usual mind of its own.

As I mentioned last month, volatility has returned to the market. We had our best day in about three years during June when the Dow Jones Industrial Average was up over 200 points and several other measuring sticks — the Standard & Poor's 500 and the NASDAQ — had a great day also.

For the month of June, the S&P was up 1 percent, the Dow was up ½ of one percent, and the NASDAQ was up about 1/3 of one percent. As I talk about year-to-date I am measuring from Jan. 1 through June 30.

Year-to-date, the S&P is up 2.7 percent, the Dow 4 percent, and the NASDAQ continues to struggle a little down 1.5 percent. The S&P Midcap 400, a measurement of mid-sized companies, is up 4.2 percent and the S&P Smallcap 600 is up 7.7 percent. The Investors Business Daily Mutual Fund Index of some 24 mutual funds is up 4.1 percent YTD.

As we look at the foreign markets the EAFE Index is up a little over 10 percent. If your portfolio is diversified, you are looking at very mixed returns. How you are doing depends on where you are.

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The bond market is still weak with rising yields and falling prices. If you own bonds, you are likely not making much money there.

This is a time when being conservative hurts a little.

In my view that is OK. Bonds sometimes let people sleep at night so that is alright with me.

The yield curve is still sort of flat with the three-month U.S. Treasury bill yielding 4.98 percent and the 10-year Treasury note yielding 5.15 percent. To a rational person it seems that it would be a no brainer to be putting your money out three months and getting paid almost at the 10-year term.

Why risk investing for 10 years when you can get about the same return for investing for three months? That, my friends, is what makes a horse race: differing opinions.

There are those people out there saying the 10 year is the way to go. What they are saying is rates are bound to go down. Then there are those people who are saying the exact opposite.

If you and I knew which was right, we could make a lot of money.

I lean toward buying the 10 year but what do I know? If I did it, it would be nothing more than a hedge, hedge meaning with some of my money.

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By the way, speaking of hedge, Maddog and I were coming out of our favorite Mensa meeting the other night when I looked down at her and said, "For the first time in 30 years I agree with Alan Abelson." She glanced up at me with that "you are a genius look."

If you don't know, Abelson is a long-time columnist with the Barrons financial weekly. He is a great writer, but I swear he has been bearish for the more than 30 years I have been reading him. During that time the Dow has gone from 500 to 11,000.

Anyway, he says in the July 3, 2006, issue, "Let us confess that we are agnostic on the idea of regulating hedge funds. We don't think it will do much good and we're not sure that it matters."

I agree. If I could meet the qualifications, I would likely own one. That, however, has nothing to do with you.

Remember I never make recommendations to you because I don't know your particular financial situation. By the way, if you don't know, the basic definition of a hedge fund is that they can borrow money and go short, short meaning selling stock they don't own, a bearish strategy.

Believe me that borrowing money and going short can make for an interesting ride.

Feel free to check out my Web site for free investment information and to contact me at www.hjpentony.com

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I was watching a Steelers game over the winter when my wife asked me my thoughts on a living will. I told her that I never wanted to exist in a vegetative state, dependent on some machine and taking fluids from a bottle.

She got up unplugged the TV, and threw away my beer. I don't think she's funny.

Howie Pentony is a Butler financial adviser with UVEST Financial Services, Member NASD/SIPC.