Things You Should Know:

As we have written before, the risk of a recession is directly related to how much consumers pull back their spending.  Evidence of this was the decline in retail sales in December.  The employment situation is deteriorating, with the unemployment rate edging up to 5%, although it’s still low by historic standards.  Add the barrage of negative headlines from the banking sector, and the stock and bond markets are now pricing a recession.  Stock prices have declined more than 10% from their highs in October, moving past the typical benchmark signaling a correction, fueling concerns that we may be entering a bear market.

At D3, we continue to monitor the economic and market landscape, looking for the turning points.  At some point, as the Federal Reserve continues to lower interest rates every 6 weeks, market optimism will return.  We continue to believe growth in the U.S will slow to near zero, avoiding a recession, but the credit crisis with the banks continues to worry us.  It’s much worse than we thought.  Economic growth outside the U.S. will remain stronger than here at home, but will slow from last year’s levels.  We currently see the best opportunities in municipal bonds and value equities, since the markets are now punishing the securities of both strong and poorly performing companies.


D3 Financial Counselors LLC Update:

We were selected by MONEY Magazine , in the December issue, to offer planning advice to two young doctors in the Chicago area.   Call us if you’d like a copy sent to you.    Here is the web link: //

We have changed our asset allocation models for 2008, to reflect the slowing U.S. economy.  We have reduced allocations to our Growth and Alternative Investments (commodities and real estate) categories, and have increased our allocations to Value and International Equities. Additionally, with money market rates falling, we have been deploying cash into bond and global fixed income funds.

We are ready to prepare tax returns for our comprehensive clients.  We have included a link to the tax almanac website if you have questions about permissible deductions and credits. Here is the link: //

We’ll be calling clients at the beginning of February to set up appointments for you to drop off your tax information. At this appointment we will also review your portfolio performance through 2007.

Finally, we are required by law to send clients our privacy policy, annually. As always, we do not disclose anything to anyone, unless directed by you to so.  We are also including first quarter invoices.  If you have authorized us to deduct the fees from your accounts (your invoice states this in the lower left corner), you don’t need to do anything.  Otherwise, please send us a check, or instruct us to deduct the fees by indicating so on your invoice, and mailing it back to us.


As always, THANK YOU for your business, and please continue to think of us when someone you know needs to “Understand the economic consequences of their financial decisions”. 


Donald D. Duncan MBA CPA/PFS CFA™ CFP®        Nancy Lencioni & Becky Connery

Peter Marchese MBA CFA™                                       Michael Meyers MBA CFP®