This is led by the US market decline and fears of a US recession and the continuing sub-prime loan problems.

We are not surprised by the US recession issue and predicted problems in the US almost two years ago.

However, we also made the point that Australia is no longer influenced directly by the US economy as in the past as our major trading partners are China and Japan and the Asian region generally. For that reason, we see the current market decline in share values as a relatively short term issue.

In this environment it is worth reinforcing some fundamental truths:

·        The decline in share market values has no influence on dividend income levels. Therefore, your portfolio will continue to sustain its income with no impact on the value of asset holdings.

·        You are long term investors and your portfolio comprises quality assets that have the capacity to recover value very quickly.

·        When the market recovers – and it will – it will happen very quickly. History has repeatedly shown that investors who desert the market when it declines and miss the recovery are the real losers.

Most importantly, we have lived through these volatile periods many times before. Whilst we never take anything for granted, you may rest assured that we have reviewed your portfolio and are very comfortable with the assets that you hold, their ability to sustain income and their potential to recover value based on fundamental financial factors which always dictate the true market value of shares once the volatile “dust” has settled.