Stocks continue to remain under pressure, but holding the psychologically important Dow 8000 mark as January came to a close. The S&P 500 notched its worst January on record. Let us continue to remind investors that setting a bottom in the stock market is a process rather than an event, as is the road to a recovery in the economy. For those more taking a more pessimistic view, you have to decide “how big of an ark to build.” Despite holding an abundance of cash as well as high quality securities, we continue to believe that an improving credit market should begin to manifest itself in higher stock prices over the long haul. Corporate earnings, although dismal have more-or-less come in line with expectations as has the dour outlook put forth by CEOs. The economy has also taken a hit which more than likely will continue through at least the first three quarters of 2009. The question is, “has the more than 40-percent decline in stocks priced in this severe recession.” As with any bear market, both the bullish and bearish camps have valid points. In our camp, we believe that the pendulum is slowing and in an uneven fashion shifting from selling into strength over to buying on weakness. Also, as noted over the past two months, in our opinion, the bond market currently offers “once in a generation” opportunities relative to treasuries and we strongly recommend that investors take advantage of this. Regarding equities, and as noted for the past two months, we have changed our posture from a defensive one to an offensive one, noting that investors selling at these levels are in company with those who must sell and those who are panicking, historically not a profitable group to join. If you are looking out over the next two to five years, stocks offer compelling opportunities. However, if you are looking out over the next two to five months, there may be a better time. That said, given the multi-hundred point daily swings in the stock market, be certain to add to positions on fear and weakness rather than strength.