DECEMBER 2009 NEWSLETTER

What a difference a year makes. This time 12 months ago many investment analysts believed that we had witnessed the bottom of the downturn and were beginning the steady climb upward. However, the market lows of Fall ’08 would soon be tested and surpassed as the major indices were driven downward once again through the first quarter of 2009. Nine months later and we have witnessed a rebound of over 50% for the Dow Jones Industrial Average. This momentum has brought us back to values reminiscent of August 2008. This is great progress, but it may be all the progress that owning equities can give us.

The outlook we have for the markets is still good through the summer of 2010. There is still money on the sidelines, both investors’ and the governments.’ We perceive the potential problem is that the outlook for real growth from thriving businesses is still weak. The immediate debt overhang of residential and commercial mortgages, credit card defaults, and government deficit funding is daunting to say the least. The extended unemployment and expiring unemployment benefits will come home to roost soon. It is during times like these that it becomes very important to manage risk effectively. The future is unknowable. Risk, however, can be managed. As money from the sidelines continues to move into the market and bolster the recovery, we are presented with the opportunity to reduce the volatility within portfolios and move to a high proportion of stable investments. The objective is to take advantage of growth if it occurs, and hedge against the volatility that can be caused if the other shoe drops.

Portfolio management is a critical piece of financial planning, but it is not the entire pie. You should have confidence knowing that your advisors at Dominion Wealth work to integrate all aspects of your financial life into a comprehensive strategy for long-term success. We have weathered quite a storm over the past two years. Managing risk and ensuring you have the necessary cash flow to accomplish your goals are our two primary points of focus moving forward. There is a lot of work to be done in 2010 and we will continue to meet regularly and make progress.

As a quick administrative aside, we anticipate distributing your 2009 Gain/Loss reports and deductible fee reports in mid to late January. Duplicates can also be sent directly to your accountant if you’d like. Our office will be open through the holidays and we are available to assist as needed with any year-end questions.

Please have a wonderful, rejuvenating time during this typically slower paced time of year.

Cheers to a Happy New year!

Your Advisors at Dominion Wealth