December 2004 Newsletter

Happy Holidays!

Many of us feel more charitably inclined around the holidays, probably as a result of all the seasonal appeals for help as well as the messages of love and good will to others.

It is always a good exercise to count your blessings, and we hope your list is as long as ours. We appreciate our clients and the trust they place in our advisory services — many of them for more than 10 years now.
And I am grateful for our talented team of professionals at Silver Oak that continues to show up at work each day and help clients with their financial, personal and emotional issues.

So once again we will be closing our offices for the last two weeks of the year (from December 20 thru December 31) to allow staff some extra "rest and relaxation" over the holidays. We plan to come back refreshed and ready to serve you
in 2005 on Monday, January 3rd.

[We'll be checking in for messages, so leave a voice mail or email if you need us before then.]


"Do all you can with what you have in the time you have in the place you are." -Nkosi Johnson (who died in 2001 at age 12, of AIDS)

"You cannot do a kindness too soon, because you don't know when it will be too late." -Ralph Waldo Emerson (I think, does anyone else know?)

"Always do right. This will gratify some people and astonish the rest." -Mark Twain

"Life is no brief candle to me. It is a sort of splendid torch which I have got a hold of for the moment, and I want to make it burn as brightly as possible before I hand it on to future generations." -George Bernard Shaw

"We make a living by what we get, and make a life by what we give." -Winston Churchill

Investment Boot Camp 2005

Here is the next date for "boot camp:"

March 12, 2005 9:30 am to 11:30 am

Call or e-mail if you or a friend wants to sign up for this program. There is no charge.

Have You Met Jessi?

Just after the last newsletter went out, we hired Jessi Howe to replace Jason who replaced Rodger who replaced Paul Braghero. We are confident that "third time is the charm" and Jessi will be our next long-term employee!

Jessi is 21 and will graduate this spring from Linfield College with a BS in Social and Behavioral Sciences. In true bi-partisan style, she also attended both Oregon State and University of Oregon!

She is a Portland native currently living in the Southwest part of town, is single and likes to read, go to "artsy" films, and travel.

Her desk is in the front reception area, so next time you are in the office be sure to introduce yourself so she can put a face with your name! She is also a notary public, if you need that service.


Don't forget to make your 2004 IRA contribution, if you haven't already. After the first of the year, you can also make your 2005 deposits.

The annual limits for retirement plan contributions will go up in 2005 to:

If you are over age 50, the limits are:

Stock Market Lessons - Part II

(Reprinted with permission from Sigma Investment Management Company)

You probably do not know more than the markets. As stated in [Part I], the financial markets are very good (but not perfect) discounters of all known information. So any time you are considering an investment move based on some piece of information, it is a good idea to stop and think about why you think you know more than everyone else. It is possible your information is not already reflected in the markets — it just is not very likely. Investors are habitually overconfident about the value of the information or "insights" they glean from reading and hearing the same stuff as everyone else.

In the late 1990s, many investors poured money into Internet stocks, awed by the prospects of technological change. But guess what — your Aunt Tillie knew about the wonders of the Internet too, as well as Goldman Sachs, Warren Buffet, the readership of Money Magazine and that neighbor up the street who gives you the creeps. Enthusiasm was already priced (and certainly overpriced) into the markets.
"Everyone" now knows that interest rates are extremely low, so bonds (that go down in price when interest rates rise) are a bad investment because interest rates will almost certainly rise. But why would anyone think this common knowledge is not already reflected in the market price of bonds? Surely the Japanese, who own a boatload of U.S. Treasury bonds, are smart — don't they watch Wall Street Week and know that bonds are likely to decline? Why are they still holding their bonds?

When you are tempted to act on "news" like "interest rates are too low," "the Internet is changing the economy," or "Martha's sentencing will knock her company's stock price down," go the additional step of asking yourself "what makes me think I know more about this than the markets?" It is a question we ask ourselves all the time.

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