2007 was a volatile year for the growth components of our portfolios. Market volatility often provides unique tax savings opportunities and utilizing the tax code to your benefit is one of the ways we work to preserve and grow your wealth. In this letter we share techniques we use to manage taxes. Our investment philosophy dictates that we focus on things we can control first and foremost and while it is true that taxes cannot be completely eliminated, they can be minimized, deferred and managed in a way that may increase your net return relative to the average investor. In this letter we cover the following areas: Passive Asset Class Funds, Tax Managed Asset Class Funds, Year Round Tax Loss Harvesting, Security Location, Managing Year End Distributions, Specific Tax Lot Identification, Charitable Gifting of Low Cost Basis Investments, Monitoring Opportunities for Roth Conversions, Managing IRA Distributions.