It's a wrap! We can officially close the books on 2007 ASAM investment portfolios.

WHAT HAPPENED WITH ASAM IN 2007?

1. Due diligence, due diligence, due diligence. Behind the scenes at ASAM, we are continuously monitoring the investments that we are currently employing in our portfolios. But it is the research on investments that the clients never actually see that most of the value lies. ASAM continuously seeks out new and exciting investments to help diversify the portfolios. Members of our team traveled to 7 different states in '07 to evaluate investment options as well as communicate with current investment managers. We might look at 25 to 50 different investments to find one or two "golden nuggets". Trust me when I say that you don't typically get this kind of dedication to investment selection at other firms.



2. Rolled out on a limited basis with our new ASAM-style consolidated reports. Clients that have many alternative investments as part of their portfolio allocation will be more likely to receive this new style consolidated report over the next few quarters. The alternative investments include Hennessey Financial Monthly Income Fund, Warsowe Mortgages, KBS REIT, Triple Net (Grubb and Ellis) REITs, GK Development Real Estate, etc…



3. The creation of the ASAM "Board of Advisors" (BOA) was a huge success. The founding BOA (made up of a few current clients in addition to some very well-respected professionals) fulfilled their one-year term. We received the critical input on our business strategies and thought processes that we so desired. Our 2008 BOA has been formed and the initial board meeting is tentatively scheduled for Feb 13th.



4. ASAM will remain a boutique wealth management firm. We will be limiting the number of new clients that ASAM will engage each year as well as increasing the minimum account sizes that we will accept. In order to keep ASAM profitable and personalized, we will only engage roughly 15 new clients each year with portfolios of $1 million and greater. However, we know that valued clients from time to time may need to refer a family member that does not meet these criteria. Therefore, we have created a turnkey system to accommodate introductions from key clients below that minimum. This approach would not overly tax our current infrastructure yet still deliver an avenue to help them meet their financial goals.



5. In order to remain a thriving business that can sustain all market conditions, the BOA agreed that we have reached a point where we needed to slightly increase our wealth management fees for some of our existing client relationships. We began to break down our fee structure into two components; a) Money Management -- portfolio and investment analysis / monitoring and; b) Wealth Management - comprised of all other consulting with regards to your financial well-being. We have been discussing fee increases on a one-on-one basis (in person or over the phone). As always, ASAM must continue to provide enough value to justify any fee that it charges.

WHAT TO EXPECT FROM ASAM IN 2008:

1. The same "world class service" and communication



2. More new investment due diligence and offerings



3. Some hand-holding when necessary during expected market volatility



4. New and improved technology when available

*ASAM PERSPECTIVE:

Does anyone really know what the financial markets in 2008 will look like? If they say they do, run fast!

2007 was another rollercoaster of a year in the investment world. The S&P 500 Index finished +3.5% for the year (w/o reinvested dividends). In October, the index peaked at +10% while it's low point was in March (at -4%). For those of you invested for the entire 2007 year with ASAM, you most likely experienced positive returns in your portfolio. If you came on board during the third or fourth quarter of this year, you may have experienced a negative return year-end. Timing is everything in the short term only. As we preach time and time again, don't get too shortsighted as the equity portion of your portfolio can dip quickly, however, the fixed income portion takes a whole year to show its total stabilizing value.

Key Message: Don't get suckered in by friends and co-workers quoting 20%+ returns for 2007. Returns well in excess of major index returns (such as the S&P 500) require very high levels of risk and aren't sustainable for the long haul without major downturns. From our client conversations, some clients experience mild cases of nausea with only a 5% decline in their portfolio total value at any given point. Imagine the stomach churning at 25% annual dips in value.

If you feel the need to respond to those claiming huge returns, share with them the 40% average annual return in the Emerging Markets Equity asset class over the past five years (Source: Morningstar).You might also want to share the tremendous volatility in that asset class and for that reason one should only allocate a very small percentage of a portfolio in that arena.

As we wrote in all prior memos, the ASAM philosophy has been to protect the downside and let the upside take care of itself. Our strategy continues to be incredibly effective.

Stay the course!

Thank you again for entrusting ASAM with such an important element of your life. Also, should you or your accountant require any information from ASAM, please don't hesitate to contact us.

Warmest Regards,

Stuart Horowitz, MBA, RFC, CFP®
Senior Partner

Andrew G. Rosenberg, Esq. CFP®
Senior Partner