Economic Outlook and Investment Options

Economic Review Q1 -2004 (from Federal Reserve "Beige book-4/22/04")

• Economic activity increased across the nation from mid-February through early April.
• The growth was widespread as retail sales moved up noticeably, and manufacturing, mining, energy, tourism and services all grew. In addition, new home construction is strong in a number of districts. However, commercial real estate markets remained soft.
• Lending activity increased and credit quality remained solid. Conditions in the agricultural sector improved overall with higher prices for most products.
• Meanwhile, labor markets tightened somewhat with modest wage increases. Many districts reported modest increases in overall consumer prices, but most districts indicated significant increases in numerous commodities and input products.

Overall Economic Outlook 2004

• The original Outlook for 2004 GDP with growth of 4% seems solid and may even be a bit on the low side by year end.
• The original Outlook for a 10% + 2004 housing price increase is being driven up by short supply, and is now expected to be equal to 2003 increases that were 20%+ nationally.
• Fed Policies (i.e. interest rates) could be used to correct if the first half growth gets to rapid, but right now slower progress with employment growth and wages are making them reluctant to act too fast. Raising interest rates too fast and too often was a mistake they made in 2002 -2003. Overall a very healthy outlook to be fully invested in 2004, and having your money working for you!

Types of Equity Investment Options: (Financial Advisor: Darrick Walker Wachovia Securities*)

• Money Market - Liquid cash accounts Bonds - Fixed income
• Stocks - (Value, Growth, Income, plus Covered Calls & Options)
• Mutual funds (with various focuses)
• Hedge funds
• Commodities, Currencies, Metals, etc.

Types of Real Property Investment Options: (Gary Smith)

• Land
• Single family
• Multifamily
• RE Loans
• Commercial
• Industrial
• Retail