The markets finished modestly lower on Monday on news that a major deal between Dow chemical and a Kuwaiti chemical company fell through, threatening Dow's agreement to buy Rohm and Haas. On Tuesday stocks surged up as investors were heartened by the government's willingness to bail out GMAC, the financing arm of GM. Despite a lack of news on the last day of the year, the market finished with a nice gain on Wednesday, a small consolation for an otherwise dreadful year for equities. All markets were closed on Thursday for New Years. The New Year started with a bang on Friday despite a poor reading on manufacturing. The major indexes finished up nearly 3%.

The NorthStar StockCompass portfolio was unable to keep up with its benchmarks this holiday-shortened trading week. While logging a very respectable 4.5% gain, the S&P 500 (+6.8%) and Russell 2000 (+6.1%) performed considerably better. However, for December and for 2008 as a whole, the NorthStar StockCompass soundly beat its competition, outperforming the S&P 500 by 5.4% in December and 19.0% for the year. Similarly, the NorthStar StockCompass outperformed the Russell 2000 by 0.8% in December and 16.8% for 2008.

These weekly updates are meant to highlight recent developments in the financial markets and to provide a snapshot of short-term performance. However, NorthStar focuses on the long-term view through our disciplined and consistent investment approach which emphasizes risk management and fundamental research.