Looking Ahead In 2008

I hope this finds you well and that you enjoyed a good holiday season. 2007 is behind us and 2008 is lining up to be an interesting year. As little as three weeks ago t he majority of the economists were saying that a recession would be avoided. That majority i s rapidly declining. The combination of close to $100.00/barrel oil, the housing market, the sub prime mortgage market, the de-valuing dollar, the assassination of Bhutto in Pakistan (a nuclear power with a now very unstable government), and the great unknown of the SIV’s, CDO’s, etc (read credit derivatives) makes for a fine cocktail t o create a difficult investing market. The Fed has reduced interest rates yet again with more rate cuts on the horizon. They are in a devils game of preventing a recession at the peril of inflation.

This New Year brought us the worst first day performance since 1983. I should note that the market was up by year-end 1983. It is times like these that for me, make being a value investor a more comfortable style than the growth style even though growth did be tter in 2007. The foreign markets continue to out perform the US and as I’ve stated before of fer more compelling options than the US markets. The January 3, 2008 Wall Street Journal shows the Dow Jones Industrial Average to have a 6.6% three year average annual return and the S&P to have a 6.1% return.

Willis Ashby, CFP® owns Integra Financial, Inc. which is a fee based Investment Advisor in Greenwood Village, Colorado. For a free consultation please call (303) 220-5525

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