|Our Current Market Concern:|
There is no precedent for what has happened in the United
States, and therefore the impact on stock markets is
incredibly difficult to gauge. It all hinges on whether
investors expect the world economy to take a nose-dive
or whether they are confident that a global crash
can be avoided. Share prices, after all, are a reflection
of a company's value and its prospect of future
Worst case scenario :
With air travel severely restricted, and the
government burdened with the costs of rebuilding New York
and the Pentagon, the US economy could slowly grind to a
US consumers, fearing the
worst, stop spending, thus accelerating the
downward spiral. An already weakened US
economy goes into recession, dragging down the
rest of the Western world.
Developing countries, meanwhile, would be
starved of investment and would have not
markets to sell their products.
The optimists view :
But some people believe the attack could actually
trigger a global economic turnaround.
Central banks have hinted that they will make
credit cheaper. Analysts expect further sharp
interest rate cuts both in America and Europe.
While companies and consumers will
find it cheaper to invest and spend, the US
government will go on a massive spending
program, both to rebuild and to improve its
Taken together, this
massive demand should boost the economies in America and
Europe, and could set them back on track for global
My MHP Reflection:
This is a tragic season in history. We do
not want to minimize the personal cost and
deepest fears that we as a people and nation face. As a
financial advisor, I know that we need to address the
financial concerns of the families we serve. I know that
people react based on their emotions. I do not want
to sensationalize or down play the seriousness of
the season. We must have faith and hope in the future. I
quote, John Train - "One of the safest times to invest is
when the news is awful and markets are depressed:
The Time of Deepest Gloom " . We are definitely in a
state of gloom. We should not be surprised that markets
could go down somewhat. How long, we do not know. Why?
We do know why, it's scary out there. I quote
Peter Lynch - "If you sell in desperation, you always
sell cheap." Warren Buffet long standing advice is -
"When the market plummets, neither panic nor mourn".
I say, " We must mourn for the people, but not the
market" My parting advice is from Stephen Peak " You have
to make a decision to buy or sell or do nothing and
often doing nothing can be the right thing." Finally
the hardest thing to do as quoted from Jim Rogers - "
Just about every time you go against panic, you will be
right if you can stick it out." These are our
thoughts at the current time, I hope they are of value
and help guide you through these very stormy waters.
Timothy L Ross "Merchant of Hope & Prosperity"
" Where Client Goals Become Our Goals" www.timothyross.com