From the Heart of Keith and Debbie

Unnerving, worrisome, panicky, angry, helpless, questioning…we know that you are feeling some or all of these emotions….we are too….

Needless to say we are experiencing a global crisis of which we have never experienced. The diversification story isn’t working, the “stay the course” is wearing. We are in a recession, the value of our homes has dropped, our portfolios have dropped, business has slowed…and quite frankly the outlook is disheartening. Unfortunately it may be this way for a while so what do we do or can we do?

Well, with the market down 37% year to date we would have to say throwing the towel in at this time would not be a prudent thing to do. The market could go lower from here but we would like to think that there is more upside opportunity long term.

Let’s go back to last year when portfolios were up, what did we do? We stayed the course. We made sure that you had enough cash available to meet cash flow needs for at least a few years, we rebalanced portfolios (selling equities and buying fixed income) and we resisted temptation to want to increase our equity exposure during the good times.

Up until June of this year our portfolios were holding up very well compared to the markets. It’s been the last three months where the old proverbial “@#$& hit the fan”. It blind-sided even the brightest of Wall Street veterans.

We can give you statistics about previous market crisis but that is history. The account values are what they are today and admittedly they are very painful to see. What is important is that during times like these we do not make drastic changes (unless your current cash flow situation has changed).

What the Fed and Government are doing today will have a positive impact on the markets but it is going to take time. There has been irrational selling going on. At this point we would have to think that there is greater upside opportunity than downside especially looking out 5 years. Just like last year when portfolios were up it was just on paper, these losses (although painful) are just on paper.

We're allowed to feel the emotions, but how we react to them is going to be far more important than any short-term swings.

We have to believe that we will survive this crisis as we have many times before. For those of you in your earning years this presents a tremendous opportunity to build wealth for the long term. For those of you in retirement we have positioned your portfolios to weather storms like this.

We thank you for your trust and confidence. Be assured we are feeling the same emotions that you are. Our job is to get you through this tough time in one piece.

We look forward to enjoying a glass of wine with you at our 3rd annual wine tasting on November 6th. We’ll assume there will be a bit more wine consumed this year ☺