STOCK MARKET GYRATIONS ! 

Even though I have been retired from the role of Financial Advisor at Merrill Lynch for almost two years, there are still times that remind me of how difficult it is to be the advisor helping others with their wealth.  This past week saw the popular stock market indicators drop 5% to 10% in just one week's time.  Depending on how a client's portfolio is constructed they may see a slightly better or worse performance than the averages, but for most people their net worth probably followed this same pattern if they own stocks.  Why do we always think that our personal worth is somehow wrapped up in the latest gyration of the stock market.

This can be the time of the greatest second guessing.  The number of comments including "woulda"; "coulda"; and "shoulda" abound in many circles and the guilt for what is wrong in the world is easily assessed to anyone with a title of responsibility.  Memories of previous market drops and financial crises always come to mind and the answers from that period may not be appropriate for this time.  I thought it would be useful to share some pearls of wisdom since my silver gray hair was acquired from mostly market corrections. 

In 1987, clients were calling and asking why the market dropped almost 20% in a week?  Their concern was simple math.  A few more days like the last 5 and we would be to zero in no time at all.  "What do I do NOW", clients would ask?  My answer became the same for almost all clients.  I was not smart enough to get you out of the market a week ago before the 20% drop, I am not any smarter today than I was then and I will not encourage you to sell now that the market has dropped this much this fast. This was also the time to start thinking as a contrarian I would suggest. 

Actually, as a long term investor, I would like to be buying and likely very soon if the market keeps selling off like this.  It was always amazing to me that changing the mode from fear to greed had some redeeming qualities.  This periodic dose of reality for stock market investors is the best time to re-examine our priorities and loyalties.  And yes, this is a time to keep it real as investors with really deep seated fear maybe should not be in the market or not in the market as aggresively.

Is your faith and quality of life wrapped up in how your portfolio adds up at the end of the day?  Have you allowed this current market episode to pass by without you sharing your witness of the "peace that passes all understanding?"

Matthew 14:27  "Peace I leave with you; my peace I give to you;  not as the world gives do I give to you.  Let not your hearts be troubled, neither let them be afraid."

This is Jesus plan for dealing with unsettling problems of this world.

Sent July 30, 2007

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