For Immediate Release

Vancouver, BC (August 13, 2002): According to the National Bureau of Economic Research, the U S economy’s 10th recession since the Second World War officially began in March 2001.

A consensus of opinion concluded that past recessions averaged around 11 months each. The published figures are as follows:

Source: National Bureau of Economic Research, Bureau of Labour Statistics

Some experts have declared the latest recession to have ended. However, we continue to hear much talk about the dangers of a “double dip” recession.

It's a confusing picture, to say the least. Let's focus on some recent US economic data:

• US companies announced about 81,000 layoffs in July 2002.
• Thankfully, this number is a drop from the nearly 95,000 announced in June 2002.
• This makes it 17 months of continuous job losses reports.
• Telecom firms alone have announced about 186,000 layoffs since January 2002.
• The US government reported that the economy created only 6,000 new jobs in July.
• Wages are practically standing still.
• US retail sales rose 1.2% for July 2002. Or, they rose 0.2% excluding automobiles.
• The GDP grew 1.1% in the second quarter 2002, compared to 5% growth in the first quarter.
• The state of the airlines industry, to name one sector, will put pressure on further layoffs.

The recovery in the US has lost momentum since the beginning of 2002. Corporate America has not found the confidence to make capital expenditures required to sustain the recovery.

There is one piece of good news. The 15 and 30 year mortgage rates in the US are at their lowest level in two years. This bodes well for the real estate sector and consumers wishing to refinance mortgages.

Investors who are still saving, or in the midst of retirement, were breathing a sigh of relief today when Alan Greenspan left interest rates alone. This group is already painfully aware of the paltry returns from their savings.

Continuing worries about the economy, together with investor skepticism of corporate results, weigh heavily on the prospects for a recovery. Not to mention, the continued volatility on the stock markets.

I’m the first to admit I would love to be wrong. From my vantage, it looks like we’ll have a limping economy for a while yet.

We may be skewing economic results now at the expense of future activity. What happens when consumers have stuffed all the 0% automobiles in the garage?

However, this does not necessarily mean that we will also have limping stock markets.

Investors know that markets are anticipatory. In the past, they’ve moved up 6 to 12 months before the actual recovery. In reality, the majority of investors will miss the market bottom.

Investing is clearly in the marathon category, not the 100-yard sprint. However, for some, the marathon may have just become longer.

Some adjustment to personal investment strategy may be required to cope with the continued market volatility and low fixed income returns . Revisiting expectations from the retirement nest egg is a worthy exercise.

Investors ought to be asking “What’s important about the nest egg for the long-term?”

NOTE: The information provided above is intended for general informational purposes only. It does not constitute advice for anyone's specific situation. Everyone should always first consult directly with their advisors to determine the appropriateness of any information contained above before taking any action. KCM Wealth Management Inc. assumes no responsibility for any loss or damage arising from the use of, or reliance upon the above information.