In This Issue: 2008 Annual Forecast Tougher Times Ahead: A weak housing market, a slowdown in consumer spending, and tight credit markets are likely to result in slower economic growth in 2008. 2008 Election Outlook: Standard & Poor's Equity Research believes election news will most likely move markets in 2008. If Taxes Rise, Tax Free Applies: Municipal bonds and bond funds can help defray some of the impact of rising taxes. SECTOR PERFORMANCE (Chart) Bonds Away: High-yield bonds could be a good investment in 2008, as investors shake off their aversion to risk. 2008 International Outlook: S&P expects international stocks to post positive returns in 2008, but a more difficult economic environment is likely to subdue performance and increase volatility. Sector Signposts for 2008: S&P Equity Research analysts provide their expectations for the year ahead. Building a Well-Balanced Portfolio: This portfolio affords diversification among major industry groups. | 
