Wednesday, October 22, 2008

The Excitement Continues

The Dow Jones Industrial Average closed down 514 points today, apparently on worries that corporate earnings for the third quarter will be disappointing.  It is now becoming clear to the masses that the expected slowdown in the economy will materialize.

For long-term investors in stocks (the only time frame that applies to stock investments), this volatility and weakness will continue to present opportunities to make investments at reasonable valuations.  We believe that our attention to overall diversification, cash management,  and prudent investing will reward our clients over time, and we encourage you to stick to your plan.

If you are a participant in a corporate retirement plan, where you have the opportunity to "dollar cost average" into a diversified portfolio, consider the fact that everything's on sale, and you are going to load up your shopping cart with a lot more items than you could buy for many years.

If you are approaching retirement, this is a good time to be overweight in cash and bonds.  We tend to take a very cautious approach with portfolios as they reach the retirement years (now  you should really enjoy your bond ladder).  We certainly don't ignore growth investments for retirement, but only after stress-testing your personal situation would we then recommend gradually adjusting to a balanced position between cash, bonds and stocks.

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