Conclusion

As we noted at the beginning of this "outlook," we do not view it as a set of predictions, but a forecast, grounded in assessments based on our understanding of economics, market forces, and in-depth analysis of balance sheets and company fundamentals. Those assessments, however, are based on an ever-changing flow of information, and require us to be prepared to adjust accordingly. However, by striving to get the big picture mostly right and sticking to our discipline of risk management, we typically need only to adjust our portfolios at the margins, over time.

In sharing this outlook with you, our goal is to help our clients understand our game plan, which is grounded in how we read the world. Because we know we cannot anticipate short-term events, we instead invest for the long-term, looking for the overarching secular and cyclical shifts that continue to transform the marketplace and aligning our portfolios with them. (We look forward to sharing more thoughts with you on these shifts in future commentaries.) All the while, we are aware that we will not get everything right, which is why we focus so intensely on risk management, diversification, and sticking to our discipline. As 2005 unfolds, we look forward to applying these principles as we strive to serve your long-term investment goals.

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