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:: January 2003 | Page 4 of
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Our opinion on the outlook for the economy and the market
has not changed. We recognize that the geopolitical arena,
especially the prospect of war with Iraq and the unstable
situations in North Korea and Venezuela, contribute to the
level of risk, but this is not new information and likely
is reflected in stock prices.
As a further risk ingredient, the U.S. dollar looks increasingly
feeble, but the "flight to quality" predilection
that surfaces during times of international crisis could cause
the pattern of weakness to be reversed if hostilities start.
In addition, a softer dollar would help to reduce our trade
deficit and would benefit U.S. corporations as they report
foreign-sourced earnings, providing some offset to the risks
associated with currency flows as investors avoid a declining
currency.
Admittedly, the outlook seems decidedly mixed, in some respects
even dreary, but that is typical of the environment that normally
accompanies market bottoms. We are constitutionally unable
to be rampantly bullish and we think high levels of volatility
will continue to be part of the mix, but we think the odds
favor a solid year in equity returns in 2003.
On another topic, we are pleased to announce that the merger
of Trust Company of Maine into Acadia Trust was completed
on January 1 of this year. Most of our readers are aware that
Camden National Corporation, our parent company, also owned
Trust Company of Maine, a state-regulated, non-depository
trust company located in Bangor, Maine. The two entities have
been collaborating closely for more than a year, and we are
delighted to be united under a single corporate banner. We
will continue to maintain offices in both Portland and Bangor.
With the combination of the entities, we offer a full range
of investment management, trust administration, retirement
plan administration and custody services.
Sincerely,
Johann H. Gouws, CFA
President
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