September 2008
Issue: 61

Woodrow Wilson once said, "The truth is we are all caught in a great economic system which is heartless".  Was he ever right!  We do not want to undermine the storm that has come ashore.  But, a storm is what it is.  It will pass.

In times like these, it is important to put things into perspective.

Stock market. It is still over 10,000.  In 2002, it was at 7,500.  In the early 80s, it was at 750.

Foreclosures.  Today, nationally, they are less than 3% (Massachusetts is even lower).  During the great depression of the 1930s, foreclosures reached the height of 50%.

Unemployment. Nationally, it's at 6.1% today.  In the early 80s, it was 11%.  During the great depression of the 1930s, it was over 20%.

Inflation.  Core inflation has been ranging between 2-3%.  In the 70s, it was double-digit inflation.  It was dramatic, and it was dubbed "hyperinflation".

Housing. If you measure your net-worth by the value of your home, it has come down.  Depending upon where you are, home prices have declined by 10-20%.  They are 50% higher than they were at the start of the decade.

Now the government is unveiling its plan to right the ship. Constructive and effective government policy measures will help fix the market's problems.  We've seen problems like these in the past; and, you can bet you'll see them again in the future.   We will get through this difficult time.

If you'd like to talk, give us a call. Feel free to share this email with others.

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Time to Share. Create a Buzz.

Back to school time! Especially for college students. How to choose the right one? How to pay for it? It's all so overwhelming! Well, Campus Bound has created a resource booklet entitled the "7 Pillars for Easing the College Cost Burden", which can be downloaded from the home page of their website.

We just love a good benefit silent auction. How about you? Check out the items on the Plymouth Philharmonic Orchestra's on-line auction. New items are being added daily. Check back. You can even bid on a private, in home cheese class taught by Paula Harris.

Highballs and Hobnobbing. If you are in the Plymouth area on Thursday, September 25 from 6-8 PM, stop by Talbots at The Village at Colony Place. You'll receive a 20% discount on everything you purchase and Talbots will donate 20% of the evening's proceeds to benefit the Plymouth Philharmonic.

10 ways to protect your money now

As the country's financial system teeters on the brink of disaster, you need a game plan to minimize the damage.

Read on...

In This Issue
10 ways to protect your money now
Sit tight; it's no time to fidget
AIG Rescued
Jeremy Siegel on the Market
Note to Investors
40 sweet spots for fall
Sit tight; it's no time to fidget

As world markets take a wild ride, cashing out now will only lock in losses and keep you from enjoying the eventual recovery. Spend your time planning, not buying or selling.

Read on...

AIG Rescued: Was an $85 billion loan the right answer?

After refusing to bail out Lehman Brothers, the government agreed to an $85 billion loan to insurance giant AIG, effectively taking over the company. Knowledge@Wharton talked to Wharton insurance professors Olivia Mitchell and Kent Smetters to find out how the world's largest insurer got into this situation and how it can be prevented from happening again. 

Read on...

Jeremy Siegel on the Market: rough going for now, but stocks still a good bet

The government's rescue of Fannie Mae, Freddie Mac and AIG demonstrated clearly that the financial turmoil continues on Wall Street. In an interview with Knowledge@Wharton, Wharton finance professor Jeremy Siegel says there are some positive signals in stocks and corporate earnings, but it's too soon to say the market has hit bottom. Siegel also talked about inflation and commodities. An edited transcript of the conversation follows.

Read on...

Note to Investors: don't play games with asset allocation

For investors, 2008 has been a nightmare. The most widely followed market barometer, the Standard & Poor's 500, is down more than 16%, shrinking the holdings of millions of ordinary people who have put their faith into index-style investing.

Read on...

40 sweet spots for fall

Autumn is often the best time to beat the crowds and score vacation savings - choosing where to go is the hard part.

Read on...

Paula Harris and Bill Harris, CFP
WH Cornerstone Investments