The Stock & Bond Markets -
To say that 2008 was a challenge is an understatement. It is worth noting, as stated by the Bloomberg News Service, that 2008 " has been a year of record misery: the largest bankruptcy, bank failure and Ponzi scheme in U.S. history; $720 billion in writedowns and losses by financial institutions; $30.1 trillion in market valuation wiped out." This has been a bad year and although we out-performed again, gravity was not defied and losses, were less than the market but no less painful for us or our investors. 2009 does appear to offer better "hope" to paraphrase a new administration and economic model. This next year will provide an ideal opportunity to be broadly diversified by asset classes, to beging investing on a regular basis (e.g. dollar-cost-averaging) and both balancing and re-balancing the portfolios regularly. I believe the prime reason, in addition to correct investment selections, all 3 of our model portfolios have outperformed their comparative indexes is due to consistent re-balancing. This is a service we include and provide to all clients.

Treasury bills, notes and bonds continue to be the asset of choice for many who were looking for the ultimate in safety given that, unlike many firms that went under, the government can print money to cover debts. It's worth noting the Federal Reserve has lowered interest rates dramatically and there's not much room for bond values increasing as a result of lower rates since we're approaching a rate of zero. Given that, I'm recommending clients who don't need income to pay bills shift into lower yielding, short-term bonds which won't go down at the same rate as long- term bonds when rates do start to rise.

CELEBRATING 28 YEARS
Since 1980, I have been providing financial advice to investors and I'm proud to say that our service and performance (see "Bottom Line" section on the right) continue to be superior to the market and our peers. Thanks for your support.

Real Estate -
The National Association of Realtors said Tuesday that sales of existing homes fell 8.6 percent to an annual rate of 4.49 million in November, from a downwardly revised pace of 4.91 million in October. The median sales price plunged 13.2 percent in November to $181,300, from $208,000 a year ago. That was the lowest price since February 2004 and the biggest year-over-year drop on records going back to 1968. In addition, the Commerce Department reporting Tuesday that sales of new homes fell in November to the slowest pace in nearly 18 years, while new home prices dropped by the biggest amount in eight months.