Your Advisor's Thoughts

Wow! The stock market has been very volatile.

It seems that investors are attracted and scared away at the first sign of good or bad news.  Wednesday March 19, 2009, was the perfect example.  Here is a graph of the S&P500 index. 

 

If you look at the section highlighted with an orange circle which was at approximately 2PM when the FED made their announcement, you can see instantly the market shot up over 3%.  Then shortly after you can see half the gains were given back. 

What do I draw from this?  It is evident; a large component of the general public is not thinking rationally when it comes to this market.  People are still scared, and letting their emotion dictate their financial future.

My advice is still consistent.
1). Formulate a plan to Invest appropriately for your time horizon, and risk tolerance.
2). Act on it.
3). Stick with it.

Stay Tuned For More…

Greg is an investment advisor representative for Trustmont Financial Group Member FINRA, SIPC.

Introducing Mr. Jingles

  This is Mr. Jingles.  He has had his paws (and teeth) on the stock market for sometime.  He is a fierce beast and has been hungry and may continue to be hungry for a while still.

Any long term investor has or will experience bear markets.  It is a fact that since 1900 there have been 2 documented secular bear markets and numerous cyclical bear markets.  Most people are not familiar with the term secular bear market, so here is an explanation.  A secular bear market lasts for longer than 5 years.  If you look at the current market conditions, since 2000 the stock market as a whole, has lost value.  It started with the internet bubble burst and has continued with a liquidity crisis, fraudulent activities, and a real estate bubble burst.  The reason to look at secular bear markets is it will help us gain perspective for our current market condition.

The Great Depression, which started in 1929, was the first secular bear market since 1900.  It was fueled by fraud, a run on the banking system, and high jobless claims.  What is different is governments around the world did not act until the situation was very sever.  Though you can argue whether or not government spending will help, it is a positive thing and will have some effect (even if the spending were all pork) in softening the blows of our situation.

During the 1970's there was the second secular bear market since 1900.  It was an interesting time of surging inflation, and interest rates which stifled the economy for years.  Vietnam, the opil crisis, and the Watergate scandal added to a lack of consumer confidence.  These things seemed insurmountable, but investors who were consistent in their approach to investing were in a position to profit greatly once the market recovered.

Today things are a mess.  Economists are scattered in the estimates on the time frame for recovery, in fact they range fro 6 months to 10 years.  Consumer confidence is at record lows.  Our media is feeding off the frenzy and selling the news (Panic Always Sells).  No one really have a clue as to when the markets will return, but all the economists agree that they will recover.

So Mr. Jingles GO AWAY.  Here is how we can all work together to make that happen...

Invest Appropriately According To Your Risk Tolerance And Time Horizon
Make Good Investment Decisions
Responsibly Spend and Live As You Should

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Blogging

A Blog is a regularly maintained journal or diary posted on the Internet.

In todays tumultous market I thought it is the perfect time to start sharing my/our thoughts about what is going on in the market, economy, and news.  So get ready.  This is something that scares me a little committing to writing on a regular basis but may be theraputic in nature, and improve my writing skills.  It will give you the opportunity to know your advisor a little better, and gain confidence that our practice knows what it is doing and staying up to date on the worlds stituation.

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