Darkest Hours Create Inspiration

Although the markets may be tanking they are flushing out what can't survive in order to prime the system for future success. Some of the things that will happen are:

• Bureaucrats will lose their jobs and flood the employment market and some of them will become entrepreneurs by starting their own consulting companies.
• Businesses will trim the fat in their businesses to become more efficient.
• New creative products and services will emerge in order to make us more efficient with our tasks.
• The market will reallocate resources to their highest use
• Markets will create companies that create more value, new and better companies will evolve.
• This will be the biggest extinction level ever known of inefficient markets and companies.
• Investors will learn that capitalism is good and realize that the markets are efficient on their own.

In looking for a silver lining in all of the disruption in the markets one should see that we are already in a business climate of consolidation ala the financial industry, the auto industry and many small businesses that will get gobbled up by their more efficient competitors. And from all of this consolidation the market will be strong and ready to grow into a greater market than we have experienced in the recent past.

The Truth Will Set You Free

Please bear in mind that what is going on in the market this year is the flushing out of unhealthy business practices by the greedy on Wall Street and our legistrative branch of government.

We must stay disciplined throughout these times by keeping with our plan to get market returns and rebalancing accordingly. It may seem like times are tough but a necessary form of flushing out the bad parts in the system in order to achieve our longer term objectives.

Most investors want their financial advisers to lie to them by telling them to "relax". However now is the time to be aggressive on the buying side and get equities while they are on sale. Perhaps now is a once in a lifetime opportunity to achieve incredible rates of return going forward. As long as your time horizon is for the long term you should evaluate your portfolio as such.

The link below is Warren Buffet's opinion on the Equity Markets.
Here is what Warren Buffet had to say about American Equities
Remember Capitalism still lives in our country and will prevail as long as we defend it and have faith in it!

Disclaimer

Is it Time to Panic

Recent weeks have brought with them rough and rocky times relative to the stock market. Many investors are feeling the anxiety and fear that comes along with these unstable market conditions. If you are one of my clients you have one of the most prudent and well diversified portfolios imaginable.

What we are experiencing in the market right now is nothing new – it is simply market volatility at work. It is the downside risk that we all take for being in the market. Accepting this volatility is what makes investing so rewarding in the “good times.”

I know you have heard this all before, but sometimes it bears repeating…Market prices and movements are random. No one knows where the next 20% move will be, but the next 100% move is always up.



Encouraging you to sell now (or change objectives, or any type of market timing) would compromise your opportunity for long-term success. Remember that large wire houses and online brokers make these recommendations so that they can profit from increased trading induced by the fear created with the deep pockets of their marketing machines.

The reason you have an investor coach is to help you see your way through these uncertain times. It is your coach’s job to help you do the right thing and keep you on the best course for long-term investment success.

The right thing to do right now is to remain disciplined and rebalance as we have always done. Stocks are a long-term investment; short-term market fluctuations are meaningless in the grand scheme of investing.

Let me make a comparison. If the value of your home dropped due to a bad real estate market, you wouldn’t sell it at a loss just because of a temporary market drop. The same should be true for your investment portfolio.

When you are in the middle of down markets like this… it feels like it will never end – but it will.

This too, shall pass.

Investors who stay the course, remain diversified, and “tough it out” realize the rewards of rebounding markets.

To Do’s for the Prudent Investor:

• Turn off the hype. Ignore the messages of chaos and panic thrown at you from the media circus.
  
• Focus on the long term. Your goals and investment objectives for the long term have not changed… your portfolio is designed to weather market storms like this


• Attend an Investor Education session with your coach… it will make a HUGE difference in your confidence and understanding of what is happening.
  If you have questions or concerns, call your coach; he or she will help you do the right thing (which may be nothing at all).


• Trust in the process. You are invested in 10,000 companies in 39 countries… you have incredible diversification which is designed to protect and preserve your portfolio – even in volatile and turbulent times.
  

I have no idea when the market will turn or change. I am confident, however, that the market will do exactly what it has always done, and investors who are diligent will reap the rewards that historically have followed down periods.

We will do everything we can to help you understand and embrace these wild and free markets, so that you can gain all rewards inherent in the system.

disclaimer

Where do we go from here

Now that the government has bailed out the banks who were in trouble because of the misdeeds of congress, what will happen next. Your guess is as good as mine.

Nobody can accurately predict exactly where the market is going or where it will go because it is a total crap shoot to think this way. Emotions control the market in the short term and that is the uncontrollable aspect of the markets. That is exactly why you have seen such big swings in the markets lately. Up 900 points in one day down 500 or 600 points on another all driven by emotion.

Sound investment principals promoted by Harry Markowitz, founder of the Modern Portfolio Theory said that investment decisions should be based on the principle of risk vs. reward and these effects are measured over the long term. That being said what we are seeing is only a blip in the radar and we should stick with our goals from what were determined by our financial plan. disclaimer
For more information visit my website at http://www.yourwealthadvocate.com/