A Letter from
Phil
03.09.2011 – “Investor Lessons”
Turns out the Dow Jones Industrial Average didn’t go to 3000. The bank and auto-industry bailouts didn’t bankrupt the country.
On the two year anniversary of the start of the bull market this week, it’s worthwhile for investors to pause and reflect on some of the lessons
we’ve learned since the great financial crisis of 2008 and early 2009.
Back on March 9 two years ago, gloom was overwhelming in the markets. Buy and hold investing had been declared dead.
With stocks down 50% or 60% in the previous 18 months, and having fallen six months in a row, many investors were convinced
the markets wouldn’t come back in their lifetimes.
And then, on a spring Monday of no real significance at the time, stocks bottomed out. That’s the thing about turning points.
You never see them coming. In the coming 24 months, the Dow Jones Industrial Average and S&P 500 Index would almost double.
The lessons for investors should not be forgotten. Buy and hold investment strategies did not survive for decades because they were
fads. Investors who didn’t sell and held on or continued to dollar cost average did quite well the past few years.
And, most important, that the daily noise of news, opinion and protest we all live with, and which grows louder as we increasingly
connect ourselves, often needs to be blocked out when making long term or even short term financial decisions.
If time permits please read my past missives that can be located under news archives on this website.
I still believe remaining positive is the right thing to do. Every day, we are leaving the prior recession further and further in
our rear view mirror. The double dip recession never happened.
Real GDP has expanded for six consecutive quarters. Retail sales are up 7.8% in the past year. The ISM manufacturing index
is now at it’s highest level since 1983. The data can’t be ignored and the battle to take the credit for the recovery is underway.
I will close this letter by again asking you to review the seven letters I have written now stored in news archives.
I believe you must have faith in the future, patience and discipline to be a successful investor. My value is rooted in my behavioral
equity based practice.
As always, please do not hesitate to call me if you feel you or someone you know may need my assistance.
Phil
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03.09.2011
