 |
Greetings!
My, what difficult times these are! The market has been on a steady decline for nearly a year, and the latest news regarding AIG, Merrill Lynch, Lehman, etc. only adds to our concerns. Certainly, we here at J. Pink Associates are happier when your money is performing as you expect it to. However, it is important to remember that we have seen all of this before. And sadly, we will see this many times again in the future. While the market has its ups and downs (sometimes dramatic), we know that over time it will come back, and reward those who hung in during difficult times.
Over the past 70 years, stocks have average gains of over 11%, and bonds of about 8%. It is important to note that during that time investors have only gained about 4%. * The reason for this is that investors make decisions based upon emotion (not that we blame them), rather than logic and fundamentals (they panic and sell at market bottoms). Ultimately, there comes a day of capitulation, in which average investors throw in the towel and sell their holdings. This is the day when the bottom is reached, and savvy investors realize that there are tremendous bargains out there, and stocks are underpriced. We believe we are very close to that day, and the absolute worst thing investors can do is sell at the bottom of a bear market thereby locking in significant losses. We know this is a hard time for you as an investor, and your concerns are foremost in our minds. Our advice remains steadfast, you have good, solid investments, with long histories of success, and THIS TOO SHALL PASS. We are here for you, and are every bit as concerned as you are, and it is times such as these when we have to work hardest to keep clients focused and dedicated. It is just a question of time. Be strong!
It is most Important that you feel free to call and discuss your feelings about the market and it's effect on your investments and goals.
PLEASE FEEL FREE TO CALL AND CHAT WITH ME ANYTIME YOU WOULD LIKE TO (914) 909-1576
*Source - www.WSJ.com - Wall Street Journal
|
| Market Commentary
|
|
For the 3rd consecutive week, the biggest news coming out of Wall Street and Washington originated on the weekend. A financial bailout of the US banking system, engineered by the White House and then debated before Congress, calls for the purchase of $700 billion of troubled mortgages by the US government (source: BTN Research).
The gigantic rescue plan capped off a wild week of news. Hurricane Ike struck Houston last Monday, the first hurricane to make a direct hit on a US city since Katrina hit New Orleans in August 2005. The largest bankruptcy of a publicly-held US company was filed on Monday, taking down a firm that had survived the Great Depression but couldn't make it through last week. An $85 billion bailout of the largest insurance company in the US was announced on Wednesday after it failed to adequately insure its own financial risks. The S&P 500 fell by 4.7% on both Monday and Wednesday, the 12th and the 13th worst daily percentage falls in the last 50 years, yet somehow the index finished with a slight gain for the week. Buried by all the other news was the rise in the price of gold, up an astounding $100 an ounce for the week (source: BTN Research).
The debate worldwide this week may focus on whether the US government has bitten off too much. The addition of last week's promises to the $200 billion bailout of Freddie Mac and Fannie Mae negotiated just 2 weeks ago brings the total of new financial commitments made by Uncle Sam to nearly $1 trillion (source: BTN Research). |
| Notable Numbers for the Week:
|
|
1. UP AND DOWN - The percentage split between up and down trading days on the S&P 500 over the last 25 years is 53/47. The split YTD for 2008 is 44/56. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: BTN Research).
2. STIMULATE - The Fed of China cut interest rates last Monday, its 1st rate cut in more than 6 years, suggesting a slowdown in China's economy may be on the horizon (source: Wall Street Journal).
3. I SHOULD KNOW MORE - 62% of working Americans who make at least $100,000 in gross income do not feel they know as much as they should about investing for retirement (source: Transamerica).
4. NOT A GOOD DECISION - The Great Depression began in the US in October 1929 just 8 months after Republican Herbert Hoover took office. During the last of Hoover's 4 years in office (1932), the IRS raised the top marginal tax rate for individuals from 25% to 63% (source: Tax Foundation). |
|
This material represents an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed by NFP Securities, Inc. as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. The indices mentioned are unmanaged and cannot be directly invested into. Past performance does not guarantee future results. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market.
Securities and Investment Advisory Services offered through NFP Securities, Inc. a Broker/ Dealer, Member FINRA/ SIPC and a Federally Registered Investment Advisor.
NFP Securities, Inc. Is not affiliated with J. Pink Associates, Inc., Financial Advisors |
|
|
|
