The State of the Market

A quarter century ago, a series of blockbuster movies featuring a giant great white shark were released. You may remember a line from one of the movies: "just when you thought it was safe to go back into the water…"

The extreme volatility of the stock market over the past eight weeks causes the same feelings with respect to staying in or getting out of the equity markets. While no one can predict the future, we'd like to share a few positive thoughts with you and leave the negativity to the media and talking heads.

  • Market declines are natural. They are a normal part of the business cycle. They seem scary every time they happen, but things have always eventually gotten better.
  • Focus on the positive. Today's accounting scandals are troubling because they erode trust in corporate America, but with a little time we should be able to look back and see that they led to better corporate discipline and disclosure.
  • Holding, just like buying and selling, should be an active decision. Today, holding on, rather than cashing out, is an affirmation that the long-term future of the economy and the investments you hold is bright. The way the nation came together after September 11 is a good indication of the strength this country has.
  • Stay Invested. No one knows when the markets best days will occur. We do know that the long-term trend has generally been up and you must be in the market at all times to participate.
  • Stay diversified. Diversification has never been more important. We can't tell you what the next ten years will bring, except they won't be like the last ten.

While we share your concern, frustration and anger over recent events, it is all the more important to filter through all the negativity, much of which is conjecture, and give at least equal weight to the positive aspects of our society and economy which have proven true over and over in our history.

We hope you have had an enjoyable summer and as always, we are available to discuss your concerns and assist you in making whatever adjustments in your financial plan that may be appropriate at this time.
Material discussed is for general illustration and/or informational purposes a\only and is not to be construed as tax, legal or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon when coordinated with individual professional advice.