Legacy Capitial Management, a Roseville, California wealth management service provider, consistently outperforms the market. Since June of 2002, Legacy Capital's equities portfolio has produced an annual return of 13.34% compared to a return of 8.5% for the S&P 500 Index (data through December 31, 2007).

Principals, Joe Milam and Jim McCarthy, offered the following market commentary in the most recent quarterly letter to their clients:

Stock (and bond) prices reflect expectations about the future. When those expectations suddenly change, volatility is the result. Investors are adjusting their perceptions about the strength of the U.S. (and Global) economy, and simultaneously adjusting their tolerance for risk. The result is a "double whammy" on asset prices; a lower forecast for expected profits, and a higher discount rate used to price those future profits into today's dollars.

While there is little argument that the U.S. economy is slowing, the length and depth of such a slowdown is often overestimated initially. And, when cooler heads prevail, investors will recognize the opportunities available to world-class companies that enjoy a competitive advantage in the global economy.

Pierre Cutler
The Sacramento Executive