Should You Get Out of the Market in Volatile Times?

Jim Cramer, who is featured on MSNBC's "Mad Money" was recently interviewed on The Today Show. He advised investors to "avoid" the stock market because of its recent ups and downs. Is this wise advice?

Consider the following headlines:

1. “Wave after wave of selling again moved down prices on the Stock Exchange today and billions of dollars were clipped from values.”
2.“The…volume of retail sales went down an estimated 10% last year."

3. “In one hectic week, the paper value of the 1,545 stocks listed on the Big Board plunged by $30 billion—which is more than the GNP of Australia, Sweden, and Ireland.”
4. “The U.S. banking system has been stretched very nearly to the limit.”
5. “The recent crash bears an uncanny resemblance to the crash of 1929.”
6. “Most Americans have lost faith in the stock market.”

What may surprise you about this gloomy list of quotes is that the first one is from 1929, the next is from 1947, then 1962, 1974, 1989, and the last one is from 2002.

I could share many more such headlines, but the point is that market ups and downs happen.  The reason stocks have historically returned more than fixed income over the long-term is precisely because stock holders endure the volatility of the market. Without the volatility (risk) that goes hand-in-hand with stock ownership, the returns associated with stocks would diminish, and so would the attendant wealth. 

Emotions (and sometimes the advice of so-called experts) cause many investors to do the opposite of what will grow their portfolio over the long-term. 

If you live near Plymouth, Wisconsin, I invite you to join us for a complimentary meal and our last investor education class of 2011. We'll be presenting "Myths and Truths: the Story of Investing" on December 15th at both 11:30 AM and 5:30 PM here at Veritas Financial Services, 506 E. Mill St.

If you are out of the area, we still may be able to set up a meeting, or perhaps we can connect on Skype.  Jeremy or I would be glad to talk with you about your investments.  Just give us a call at 920-893-5262.

Margaret Wittkopp
Investment Advisor Representative

Market Behavior

In light of recent market volatility, I thought I'd bring up a little bit of market history from way back in..... 2010.  When I refer to "the market,"  I am talking only about the  S&P 500 Index, a commonly accepted measure of the US Stock Market.

Back in April of 2010, the market suffered nearly a 16% decline from April 23rd, to the market bottom on July 2nd. Our most recent episode was a 17% decline from July 7th to August 8th.

And yet, 2010 went on to be a positive year for the market.

Market declines and sell-offs come in all shapes and sizes. Long term investors should remained focused on managing risk, controlling costs, and staying diversified.

Jeremy Burri
Investment Advisor Representative

Lies and Truths #9 No One Can Forcast the Future

We began this series with the seven lies many investors believe. To see the whole "Lies and Truths" series, click the link that you will find at the bottom of this post, or in the Labels section of the sidebar.  If you are reading this as a note on Facebook, click the "see original post" link at the bottom of the note to be redirected to the blog where you can see the entire series.  

Today's truth, "No one can forecast the future" seems so obvious that it shouldn't need saying, right?  Well, it does need saying.  Just take a look at commercials, financial magazines, websites, etc. and you will see just how many people are trying to convince investors that they can do exactly that.

Because NO ONE can accurately predict the future consistently, no one can predict what the market, or individual stocks will do in the future.  If they could predict the future, why would they tell you?

We're Now in Oshkosh

We are excited to announce the opening of our new office in Oshkosh, Wisconsin!  Jeremy Burri will divide his time between Plymouth and Oshkosh, and other staff will use the Oshkosh office for meeting with those of you who will find that more convenient. 

Office hours at the Oshkosh location will vary, so call before stopping by.

The address is:

923 South Main Street, Suite E

Oshkosh, WI 54401

Phone: 920-893-5689

Jeremy outside the entrance to our Oshkosh office.

In the reception area

The office space