An Important Letter From Silver Oak Advisory Group

The Difficult Month of October 2008
November 5, 2008


Dear Clients and Friends of the Firm:

You will soon be receiving your Schwab and other account statements for the month of October 2008. Prepare yourself, because the numbers could be distressing. Excluding the 1930s, our October loss of 16.8% in the S&P 500 Index ranks third among the lowest monthly returns, behind only May 1940 (-22.9%) and October 1987 (-21.5%).

You may also be exhausted by October's roller coaster returns: the Dow Jones Industrial Average rose or fell by more than 5% on six trading days in the month of October, including two jumps of more than 10% in a single day. Those were the two strongest one-day advances since March 15, 1933. Remember to keep breathing (to paraphrase a client, if you don't do that, nothing else matters!) and minimize your contact with the 24/7 financial media talking heads.

Many non-US markets performed even worse in October 2008: measured by either quarterly or year to date results in US dollars, the US ranked fifth best among 48 world markets tracked by MSCI. Morocco, Jordan and Israel came out on top while Belgium, Austria and Russia were at the bottom. On the plus side, oil prices fell 33% in October, the sharpest one month decline since the introduction of oil futures in 1983, and the US dollar was up against many currencies.

We are now reviewing all client portfolios for year-end planning. There may be taxable losses to take before 12/31 to provide a current income tax deduction and offset against future capital gains. We will talk to each of you again about your risk tolerance and whether we need to make adjustments to your portfolios, their allocations, or your monthly distributions.

As always, we appreciate your confidence in our skills and your business. Thank you for the many new client referrals of the last several weeks, and be assured we will provide our best services to the friends and family you are sending to us.

And congratulations to President-elect Barack Obama. Whether he was your candidate of choice or not, we all wish for his success and safety as he leads the country forward.

Deborah L. Thomas, JD, CFP®
Stephen W. Hewitt, JD, CFP®
Benjamin E. Gilbert, CFP®
Jessica M. Howe
Linda Mullen

P.S. Be sure to take time to enjoy yourself this Thanksgiving, wherever you may be.

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