Over the past few months, we have seen an enormous amount of volatility in the markets. Whether it is Y2k, or interest rate fears, new clients of ours have gotten a little skittish at times. We have had to do some serious handholding as of late. For all you readers who feel the sky is falling, read on. This article was written especially for you.
“Folks, I know you have money to invest, and lucky for you, I have a powerful crystal ball. I am prepared to tell you what could happen in the future so you can be better informed to make intelligent investment decisions.”
“First of all, there is a lot of talk in the press about the direction of interest rates. Some so-called experts say they are going much higher, while some are convinced they are headed much lower. Well, I am here to tell you that interest rates measured by the prime rate, are going to climb to 23%. That’s right, 23%!”
“The crystal ball also tells me unemployment will soon be 13%. We will see businesses fail at a record pace. Banks will fail, terrorism will run rampant, we will also witness the largest crash since 1929, plus the president will be shot.”
“How many of you want to invest now?”
“What if I were to tell you that my crystal ball revealed the past not the future.”
These events occurred between 1979-1989.
During that time period the Dow went from 838.7 to 2753.2.
An average of 17.99% a year.
The way to mitigate risk is to put time on your side. “There is a lot more risk trying to time the market than having time in the market.”
Allow us to worry about world events. Stay focused on the long term. Own quality growth stocks.
“The biggest obstacle to financial success in America, is not lack of opportunity, it’s lack of patience”.
Lawrence Kudlow writes in his book American Abundance: The New Economic and Moral Prosperity:
On the eve of the 21st century the United States finds itself in a long wave of prosperity that began fifteen years ago and could conceivably continue without serious interruption until 2020 or 2030. Stock prices are higher, economic growth is faster, both inflation and unemployment are lower, technological change is more pervasive, the dollar is stronger, social conditions are more hopeful, the public spirit is more confident, and the nation’s future is brighter than anyone thought possible fifteen or twenty years ago when pessimism and anxiety were the dominant strains in American life.
Investors should take advantage of market dips and volatility. Do not follow the rest of the sheep off a cliff. Follow what the smart money is doing. Have a long-term plan and stick with it. The group of investors that has outperformed all others in the financial markets are widows and divorcees. The reason being is they do not buy into the day-to-day movements of the market. They avoid the temptation to buy into “hot fads or trends.” Be smart with your money, invest for the long-term. Our Account Repair Department has been busy helping people with their damaged accounts. If you have any questions regarding your financial strategy or plan, please do not hesitate to contact us at any time.