After feeling some recovery related relief after the market bottom in March, 2009, the bumpy last few months are making some investors nervous.  Such recovery related dips, however, are not inconsistent with previous strong markets.  There have been 11 bull markets since 1945, and during those markets there was a correction of 10% on average, in the 11th month of those recovery markets (this recent correction occurred in the 14th month).  The average historical decline in such cases was approximately 13%.

The “credit crunch” financial crisis in the last few years and subsequent partial recovery has been emotionally exhausting for many people.  At the same time, it was a valuable, albeit difficult, reminder of the importance of maintaining reasonable expectations, perspective and discipline regarding the capital markets.

Part of maintaining reasonable expectations involves not becoming overly aggressive or complacent when markets are strong.  Already, investors have a chance to put these lessons into practice.  After feeling some recovery related relief after the market bottom in March, 2009, the bumpy last few months are making some investors nervous.

Such recovery related dips, however, are not inconsistent with previous strong markets.  There have been 11 bull markets since 1945, and during those markets there was a correction of 10% on average, in the 11th month of those recovery markets (this recent correction occurred in the 14th month).  The average historical decline in such cases was approximately 13%.  Clients who have attended our “Quarterly Context” webinars were not taken entirely by surprise by the recent market hiccups.  Over the past several quarters, we showed a graph of and explained that we expect a bumpy or “squiggly square-root symbol” shaped recovery, and we believe that may remain the case for several more quarters.  Showing the upside of that volatility, at the time of this letter the market (Dow Index) has been up approximately 6% in July.

We encourage you to attend the Quarterly Context webinars.  Both personal wealth and institutional Clients indicate that they feel more comfortable when they are better informed through these sessions.  These on-line meetings are especially geared towards non-financial people, but have proven to be helpful to clients that are financial professionals and/or run their own businesses.  They are interactive, normally last only 20 minutes and are available live and then by web-based video recording (links sent via email).

Frequent and often recurring webinar topics include:

• Investor behavior patterns and issues.

• Investor pitfalls and how to avoid them.

• Tax rate changes, tax-efficient investing.

• The last 10 years was not a “lost decade”.

• Why Fiduciary vs. non-Fiduciary advisors.

• Wealth & Life Strategy process.

• How a conservative/quality bias in manager selection helps preserve wealth in difficult markets.

• Asset class spotlight.

The Advisory Group appreciates the opportunity to be the guide on your “financial journey”, with advice, perspective, access and information.

 

Contact us for guidance with Personal Wealth or Fiduciary Management.