News from Partnership Wealth Management

The Standard & Poor's website shows that their S&P 500 Index lost 38.49% of its value in 2008 leaving it with a negative return of 1.38% over the past ten years. The losses sustained in the stock, bond, and real estate markets have left many scratching their heads wondering where they can actually earn a respectable return on their money.

Hopefully the new administration will bring a fresh approach to U.S. economics that could help to resolve the nation's bleak financial situation. It appears as though Congress will issue additional financial reprieve for the many ailing businesses begging for government handouts. It also appears as though President Obama will ask the American people to balance their personal budgets; that, in time, should change our negative savings rate into a healthy, positive rate.

Feeling that paying down a high interest loan is better than losing money in the stock or real estate markets, many in America may follow President Obama's advice and pay down their debt. If this happens, we may see a continued reduction in spending by the middle and lower-classes cutting into corporate profits.

The combination of the US financial injection into corporate America, a reduction of consumer spending, as well as reduced savings/investing, we may see stocks perform more like they did in the 70's than the 80's or 90's. Back in the late 60's the market rose rapidly only to decline sharply leading into the 70's. There was a brief recovery in the early 70's only to be followed by an even larger decline in the mid 70's. While stocks did rebound by the end of the decade, they only reached a level slightly above the peak of 1968. Does this sound familiar?

I have faith in the future of our economy and markets, but the reality is that we must dust ourselves off, regroup, and prepare for the year/s ahead. I strongly suggest that you find time in your schedule to review your financial picture. You have already had a year of burying your head in the sand. You can no longer afford to wait to review your past returns and develop strategies for your investments moving forward. Additionally, you will want to update your financial plan in 2009 to reassess your goals in light of the 2008 market decline.

With all of the issues arising at banks and the major Wall Street firms, many are beginning to seek advice from local, independent advisors. Truly independent advisors are unbiased and objective. They will work with you as a partner to help you to formulate a financial strategy that incorporates both your long- and short-term goals, tailored specifically to your needs and concerns. Also, make sure to work with an advisor who specializes in your areas of concern (i.e. LGBT planning, pension strategies, eco/socially-friendly investments, etc.).