A Letter from
Phil
02.05.2010 – One year later
As we’ve entered the first quarter of 2010 we find ourselves one year removed from what I call the Panic of 2008-2009.
With the mainstream press, talk radio and the politicians getting exactly what they wanted. Negative excitement surrounding every broadcast
the “end of the world” dance was hard to stop. It was the perfect storm of negativity.
My belief is that “it is not different this time” as many of the pundits will tell you about this country’s future. It was “different this time” at the
height of the Technology Bubble of 1999-2000. As I’ve mentioned before, it is the business cycle like all those past. And the bigger the “bust”,
the stronger the recovery. Try to resist the media hysteria about unemployment. The jobs will come. They always have. But if you’re looking at a
three decade, two person retirement, you shouldn’t care about next Friday’s unemployment report, nor how the market will react to it.
And you’re not going to accomplish that sitting in a money market fund, trying to time a market turn that you’re most probably going to miss.
And that, in a few years, won’t matter anyways. Flying into cash in a panic is not a financial plan. It is equally a phenomenon of manias: the largest
number of investors converted the largest percentages of their portfolios to dot.com in 1999, to condos in 2005, and to oil in 2008, more or less
simultaneously, and at the most perfectly wrong times.
The economic indicators are stabilizing or improving, the economy is picking up momentum and interest rates will rise as a result.
One excellent way to build your portfolio, protect against rising interest rates and enter the markets through “dollar cost averaging”,
is a strategy using laddered certificates of deposit.
Investing money is a big decision and one needs to be extremely careful with this process. If you feel you are well equipped to make the decision
of investing your money yourself go ahead with it. In case you are not well versed with the stock markets, changing scenario and other investment options
it is advisable to take expert guidance to avoid an unpleasant situation.
If you feel there may be anyway that I may be of help to you or a family member? Please do not hesitate to call me.
Sincerely.
Phil Colby
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05.17.2010
