Adrian Mastracci, president of KCM Wealth Management, says “Diversify, diversify, diversify. Maintaining the appropriate asset mix of equities, bonds and cash is more important than ever."

For Immediate Release

Vancouver, BC (April 6, 2005): Is your crystal ball gazing in overdrive trying to make sense of what may lie ahead for the markets?

Mark Twain once said, “I was gratified to be able to answer promptly, and I did. I said I didn't know.”

Adrian Mastracci, “fee-only” investment counsel at Vancouver based KCM Wealth Management comments, “Investors have witnessed some skittish market results thus far in 2005. Enough to still wonder what lies in waiting for the uncertain times ahead. So, will it be rain, shine or stormy sessions? Suddenly, I feel like Mark Twain.”

“At the outset of 2005, I identified five key economic events worth watching,” adds Mastracci, “Well, the watch is still on. The question remains whether the five are headwinds or tailwinds.”

“It seems investors may be worried,” remarks Mastracci, “Appetite for risk is diminishing. Some are heading for more safety. Adjusting to a low investment return world is a continuing reality.”

“I lean on the side of cautious optimism,” adds Mastracci, “However, some speed bumps may get in the way. The markets may have to digest a few surprises in 2005 and beyond.”

“A perspective on where the equity markets have been is useful,” notes Mastracci, "The snapshot going back to 2002 paints the story."

Here is the overview of the five important economic events on my 2005 watch list:

1. Oil prices

How about those crude oil prices! A sizzling 29% jump since December 31, 2004. The high price remains the important story of the day. Speculation is rampant. Everyone feels the affects of filling the gas tank.

Reports by Goldman Sachs and CIBC suggest today’s oil price is a bargain. Predictions of US$105 per barrel price spikes by 2007 are making the rounds. This would certainly bring new meaning to the term “crude realities.” Not to mention rekindling some inflation.

2. Consumer stamina

The North American economy relies heavily on consumption and borrowing. The most recent survey points to a little slippage in consumer sentiment, but are still spending money they don’t have.

Consumer debts at record levels raise the question of how long consumers can shoulder the weight of loan payments to support the economy. Even with “measured” increases in interest rates.

3. US jobs

The US job prospects remain muddled. Businesses are conserving cash while some are still reducing their workforce. This contributes to diminished job prospects.

Look for signs of confidence. However, new job creation figures for March were 110,000 versus the expectation of 220,000.

4. US trade gap

The record $58.3 billion trade deficit in January 2005 continues to pressure the US economy. Expectations for the February trade gap are also in the 58 billion ballpark.

Canada’s exporting manufacturers are feeling a touch less pressure as the Canadian dollar is now about 82.03 cents US versus 83.11 cents on December 31, 2004. Watch for more currency risks.

5. Government deficits

Like many consumers, the US Government continues to spend more than it brings in. The March 2005 deficit is anticipated at around 73 billion. Over 40% of US debt is now held by foreign holders, like China and Japan.

The markets fear foreign investors reducing their appetite for US treasury bills, or selling some of their current holdings. The US is absorbing nearly 3 billion dollars per day of foreign investments to satisfy the trade gap and government deficit.

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“That said, betting against the US economy or the US consumer is a gutsy call,” points out Mastracci, “Such a bet is not for the faint of heart. Each economic event can change direction on short notice.”

“Rather, the two investor priorities of capital preservation and minimizing losses are the sounder approach, especially for retirees,” suggests Mastracci, “While all losses can’t be avoided, it’s about being right more often than wrong.”

“Nobody knows whether these five economic events will unfold as headwinds or tailwinds from here forward,” explains Mastracci, “Could they be signs of a slowdown? Best be prepared for bumpy rides.”

“Diversify, diversify, diversify,” concludes Mastracci, “Maintaining the appropriate asset mix of equities, bonds and cash is more important than ever.”

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.